Principle of Business Foothill college Professor Nava Winter 2020
amoral behavior
a person has no sense of right and wrong and no interest in the moral consequences of his/her actions.
An S corporation is
a regular corporation (a C corporation) that has elected to be taxed under a special section of the Internal Revenue Code called Subchapter S.
Inflation
a rise in the general level of prices over time.
Contingency planning is
a set of plans that ensures that an organization will run as smoothly as possible during an unexpected disruption.
Socialism
(type of Planned Economic System) a system whereby the government owns or controls many basic businesses and services, and the profits from them are distributed evenly among the people. The government charges high tax rates to pay for the services it provides. This economic system may tend to reduce people's motivation to work as hard as they might otherwise.
Two main factors underlie the trend toward greater globalization:
1) A dramatic decline in trade and investment barriers that makes global business cheaper and easier to conduct. 2)Technological innovations, especially in communications and transportation, have made it possible to better manage the global production and marketing of products.
What can a country do to have an edge in world markets?
1) Governments focus on improving their nation's competitiveness by improving their resources—natural resources, labor, capital (plant, equipment, and infrastructure), technology, innovation, and entrepreneurialism. They invest in health, education, and training designed to increase the productivity of their labor forces. 2) Many governments create incentives to attract investments made by private companies, such as plant and equipment. 3) They invest in public capital (also called infrastructure), such as roads, bridges, dams, electric grid lines, and telecommunications satellites. 4)They try to promote technological advances to give their nations a competitive edge, such as investments in basic and applied research at state-funded higher-educational institutions.
What are the criticisms of marketing?
1)Misuse of personal information: Marketing often involves the collection of customers' personal information, and many feel violated when this information is not adequately protected or resold without permission. 2)Hidden fees: Many of us feel taken advantage of when we must pay hidden fees and charges not included in the advertised price. 3)Consequences of purchase: Unscrupulous marketers sometimes take advantage of people who are not knowledgeable about certain features of a product.
What can businesses do to be more competitive?
1)Successful companies try to gain access to cheap raw materials, invest in workers' training and productivity, and purchase state-of-the-art plants and equipment that will give them an edge. 2)They invest in cutting-edge technology and promote innovativeness. 3)If a company, industry, or nation has lost its competitive advantage, then it has failed in one or more of these areas.
What are the elements of a good marketing plan?
A clearly written marketing objective, A situational analysis, The target market, A description of how the marketing mix will be implemented, evaluated, and controlled
How do sellers benefit from marketing?
A company also benefits by successful marketing because it sells more products, and profits enable the organization not only to sustain itself but also to prosper and continue to provide value to customers.
Can a corporation really be socially responsible?
A company has a responsibility to its stockholders to deliver a profit at the end of the year. There can be a conflict between a company's need to produce profits and the demands of CSR. Although a business reaps benefits by being socially responsible, managers at very high strategic levels must have a common vision of how the interests of the business can be supported by an effective CSR policy.
deflation
A continuous decrease in prices over time
What structure would be best for groups of businesses with common goals?
A cooperative
disinflation
A decrease in the rate of inflation
Some other characteristics of B2B markets are
A few buyers that purchase in large quantities, Highly trained buyers, Group purchasing decision, Strong customer relationship, Geographically concentrated buyers, Direct purchasing
Where will trends in global business take us?
A growing role for developing nations, A rise in non-U.S. foreign direct investment, A rise in multinational enterprises Mini-multinationals (small- and medium-sized multinational enterprises) have also become prominent. Increasing democratization and the adoption of free-market economies around the globe.
What does nation's GDP say about the country's debt level ?
A low debt-to-GDP ratio indicates an economy that is healthy. A high debt-to-GDP ratio indicates a country that is spending beyond its means.
What are the four functions of management?
A manager performs four primary functions: planning, organizing, leading, and controlling/monitoring.
Product extension merger
A merger between two companies selling different but related products in the same market
Vertical merger
A merger between two companies that have a company/customer relationship or a company/supplier relationship
Conglomeration
A merger between two companies that have no common business areas merge to obtain diversification
Market extension merger
A merger between two companies that sell the same products in different markets
Horizontal merger
A merger in which two companies sell the same types of products and are in direct competition with each other
How does the GDP act as an economic indicator?
A rising GDP indicates that more goods and services are being produced and that businesses are doing well. A downward-moving GDP indicates that fewer goods are being produced, fewer services are being sold, and businesses are not doing as well.
flow
A state of rapt attention. when you are completely involved and focused on what you are doing.
depression
A very severe or long recession.
What helps define the direction of a business?
A vision identifies what the business wants to be in the future.
Do small businesses provide opportunities for minorities?
According to an SBA report, approximately one-fifth of all U.S. small businesses are owned by minorities. Women make up approximately one-third of all small business owners.
How does Herzberg's motivator-hygiene theory explain motivation?
According to the motivator-hygiene theory (or the two-factor theory), two factors influence a person's motivation: Hygiene factors include such as a safe working environment, proper pay and benefits, and positive relationships with one's coworkers. If these factors are absent or inadequate, people tend to be dissatisfied. But if these factors are already in place, they are taken for granted and may not serve to motivate you. Motivator factors include a sense of responsibility, recognition, promotion, and job growth.
Are there disadvantages to adding partners?
Adding partners means sharing profits and control. Partners may have different work habits, styles, and goals.
How does technology affect marketing?
Advances in communication technologies may be some of the most influential factors to affect modern marketing. Manufacturing innovations have also enabled firms to customize their products to meet individual needs and offer them at prices to satisfy the varying tastes of targeted customers.
What does it mean for entrepreneurs to be "system" thinkers?
Although entrepreneurs develop companies from an idea, they must focus on the entire process of turning their idea into a business to succeed.
High purchase price
Although you can determine the value of the physical business and its assets, it is more difficult to determine the true value of the previous owner's goodwill—intangible assets represented by a business's name, customer service, employee morale, and so on that might be lost with a change in ownership. Inheriting the previous owner's mistakes, Unknowns in transition
difference between an LLC and an S corporation in Owner and employee benefits?
An S corporation may offer fringe benefits to its owners. LLCs are limited in the benefits their members can be offered.
What are the three specific issues surrounding the social environment that present potential challenges and opportunities for today's businesses?
An aging population, Increasing workforce diversity, and The green movement.
Why is measuring productivity important to businesses?
An increase in productivity indicates that workers are producing more goods or services in the same amount of time, often resulting in lower costs and lower prices.
How does the green movement affect businesses?
Anxieties about global warming and climate change have motivated businesses to become involved in a green economy—one that factors ecological concerns into business decisions.The demand for more green products presents new opportunities for entrepreneurs to meet those needs."Green-collar" jobs can revitalize large swaths of the U.S. manufacturing economy.
Are cooperatives not-for-profits?
Any profits made by a cooperative are reinvested in the organization to maintain it and improve its functioning, or profits are returned to members in proportion to their use of the cooperative, not their investment or their ownership share.
successful entrepreneurs have the following characteristics:
Are innovative and have a vision, Take risks, Are motivated to succeed, Are flexible and self-directed, Work well with others and possess good leadership skills, Are "system thinkers"—they view the whole process rather than just its individual pieces.
crowdfunding
Ask for funding from gen public. entrepreneurs put together a detailed explanation of their projects or businesses on certain websites and ask for funding.
How does a company assess its weaknesses?
Assessing internal weaknesses means that a company must perform an audit of current managerial expertise, manufacturing and financing capabilities, and an organization's execution of the marketing mix.
What are the characteristics of a B2B market?
B2B markets are generally more relationship driven than product driven.
Why do successful entrepreneurs need to be flexible and self-directed?
Because entrepreneurial ventures are risky, entrepreneurs need to be able to react quickly to unexpected situations and downturns. Entrepreneurs must be able to wear many hats and need to know when to sell or exit a business.
What special challenges do national companies face?
Because laws vary from state to state, these companies must be aware of state laws in every state where they do business. These companies also face a longer, more complex supply chain.
Why would I want to start my own business?
Because the have the Opportunity, want financial independence, control, flexibility, they are unemployed
What are the benefits of keeping employees motivated?
Both employers and employees benefit from motivated workforce. Employers find that workers are more productive and creative when provided with a motivating environment and motivating tasks.
How does a business make a buying decision, and what influences that decision?
Business purchases are generally more rational, reasoned, objective decisions based on various influences, such as the state of the economy, technological factors, the degree of competition, political regulatory concerns, and organizational objectives, policies, and procedures.
What are Regional businesses?
Business that serve a wider area than local businesses, but do not serve national or international markets.
Why do business managers need to be concerned with economics?
Businesses need to know how much of their goods to produce or services to offer, as well as how much to charge. They need to be aware of the potential impact that government decisions and the decisions of collective businesses can have on their individual business.
How do politics and legislation affect marketing?
Businesses try to influence the laws and regulations affecting them by making contributions to political parties, individual candidates, and political action committees. A variety of regulatory agencies enforce laws and regulations, constraining the marketing efforts firms can engage in.
What are the advantages of cooperatives?
By uniting, the members of a cooperative have more bargaining power to negotiate within the marketplace and thus enjoy reduced costs.
business owner protect in C Corp?
C corporations are legal entities and are responsible for their own debts, obligations, and liabilities; the owners are not personally liable for the business's debts.
Sarbanes-Oxley Act of 2002
CEOs are required to verify their companies' financial statements and vouch for their accuracy with the SEC.
Community and good neighbor policies
CSR relates to how a company affects the communities in which it does business, particularly the surrounding neighborhoods.
partnership agreement should included?
Capital contributions which is the amount of capital (money), equipment, supplies or other tangible things of value that each partnership contributes to begin the business. Responsibilities of each partner, Decision-making process, Shares of profits or losses, Departure of partners, Addition of partners
Determinants of demand (shift in curve) include?
Changes in income levels, Population changes, Consumer preferences, Complementary goods, and Substitute goods (also price).
How do you keep your business secure?
Changing online passwords regularly, making sure your wireless connections are secure, and removing personal information from social networking sites.
There are seven basic tools managers use to monitor quality-related goals:
Check sheet—A simple sheet recording the number of times certain product defects occur. Control chart—A graph that shows the average and fluctuations of a process being monitored to determine whether it is behaving within the limits of proper functioning.
M-1 money supply:
Coins and bills (currency), traveler's checks, and checking accounts. These are the most liquid assets.
How does social networking sites help companies?
Companies are increasingly using social networking to connect to their customers, promote their products, offer discounts, and build relationships.
How does Increasing workforce diversity affect business?
Companies must develop diversity initiatives such as nondiscrimination policies, a minority network, or diversity education to manage, retain, and promote a diverse workforce.
Why does the pace of technological change present challenges to businesses today?
Companies must stay on the cutting edge of technology to remain competitive, and that is an expensive and time-consuming operation. Advancements in technology are completely changing the foundation and focus of how many businesses are run.
How does consumer input affect product development?
Companies rely on customer input to help shape their products. Consumer input often provides information that prompts companies to divide a large market and focus on narrow defined, targeted customers.
How are parts used in an assembly process classified?
Component parts are assembled portions of the finished product.
What do we mean by conceptual skills?
Conceptual skills include the ability to think abstractly and to picture the organization as a whole and understand its relationship to the business community. This also includes understanding the relationships among the parts of an organization itself.
A successful manager needs to possess the following types of skills:
Conceptual skills—The ability to think abstractly, Technical skills—The specific knowledge for the discipline, Time management skills—The ability to be effective and productive with one's time, Interpersonal skills—The ability to motivate and communicate easily with others, Decision-making skills—The ability to analyze options and implement the best plan of action
How are consumer markets segmented?
Consumer markets can be segmented based on many variables or characteristics of customers. Four of the most common market segmentation classifications are geographic, demographic, psychographic, and behavioral
Consumer products can be divided into four categories
Convenience goods and services, Shopping goods and services, Specialty goods and services, Unsought goods and services
Is it easier for corporations to get funding and to raise capital?
Corporations can raise money by selling shares of ownership to a specified group of individuals. Or, when it has reached a significant size, it can extend its ownership by "going public"—selling shares of ownership to the general public. Lenders are more likely to loan money to an incorporated business because they are not limited to the credit profile of a sole proprietor or general partners.
Are corporations taxed the same as other types of businesses?
Corporations have separate tax rates.
The characteristics of A group flow setting are:
Creative spatial arrangements, Playground design, Constant focus on the target group for the product, Visualization
The 4 C's model from the consumer's perspective.
Customer replaces product.. Cost replaces pricing. Convenience replaces place. Communication replaces promotion.
Why do some people consistently make better decisions than other people?
Decision-making skills involve the ability to identify and analyze a challenge, identify and examine the alternatives, choose and implement the best plan of action, and evaluate the results. When making important decisions, managers often go through a formal decision-making process
Consumer preferences affect on demand?
Demand for a product can change based on what is popular at any given moment.
How are price and demand related?
Demanded increases as price declines.
How do cultural and social trends affect marketing?
Demographic shifts—such as age, gender, ethnicity, and marital status—and changing values can signal opportunities for businesses.
Are there advantages of being a sole proprietor?
Ease of formation, Control and considerable flexibility to act quickly, No specific corporate records to keep or reports to file, including tax reporting, No separate tax return
What are the advantages of buying an existing business?
Ease of start-up, Existing customer base, Financing opportunities
How do economists feel about protectionist trade barriers?
Economists believe that the best way to address the concerns is not to impose protectionist trade barriers.
How do managers form the best teams?
Effective teams are comprised of people with diverse skills, talents, and points of view. A balance of people who embody different team roles is the key to the success of a team.
What makes entrepreneurs motivated to succeed?
Entrepreneurs are motivated by many different factors, including providing for themselves or their families and by personal fulfillment.
Why are people skills and leadership skills important to entrepreneurs?
Entrepreneurs rarely work by themselves and need other people with complementary skills to join them in their ventures.
B2B products can be divided into five categories.
Equipment, Maintenance, repair, operating (MRO) products, Raw and processed materials, Component parts
How do firms enter foreign markets?
Exporting, Turnkey projects, Franchising, Licensing, Joint ventures, Strategic alliances, Contract manufacturing, Wholly Owned Subsidiaries
Are there disadvantages of structuring a business as a corporation?
Forming a corporation is a more cumbersome process than forming a sole proprietorship or partnership. Another disadvantage is double taxation, which occurs when taxes are paid on the same asset twice. A corporation is first taxed on its net income (profit) and distributes that income to shareholders in the form of dividends. Individual shareholders must then pay taxes on the dividends, which have already been taxed at the corporate level.
What was the production era of marketing?
From the Industrial Revolution until the 1920s, most companies focused solely on production—thus the production concept era
What are Substitute goods
Goods that can be used in place of other goods, such as Coke for Pepsi.
What are the traits of great leaders?
Great leaders challenge the process by not always accepting conventional beliefs and practices as the only way to accomplish tasks. They inspire a shared vision and motivate people to care about the mission and goals of an organization. They model the way by serving as a living example of the ideals they are asking their employees to emulate. They exhibit emotional intelligence—the ability to understand both one's own and others' emotions. They enable others to act by giving people access to information and empowering them to perform to their fullest potential.
Why is unemployment an important economic measure?
High unemployment results in an increase in unemployment benefits and government spending on social programs such as welfare. If the unemployment drops too low, more workers have increased buying power and spend more, causing prices to rise and resulting in inflation.
Human rights and employment standards in the workplace?
How a company respects and cares for its employees is reflected locally in the policies a company sets and the impact a company has on the community. As a business interacts more with the global marketplace, it will have to make decisions about ethical standards on issues such as child labor, pollution, fair wages, and human rights.
How does CSR affect society as a whole with Environmental effects?
How businesses operate has both local and global effects. It is increasingly important for industry leaders to have some structured ethical system to make complex, long-reaching decisions.
What five major areas does a company to make good decisions to be socially responsible?
Human rights and employment standards in the workplace, Ethical sourcing and procurement, Marketing and consumer issues, Environmental, health, and safety concerns, and the Community and good-neighbor policies.
The process of developing new, high-quality products involves what steps
Idea generation, Idea screening, Product analysis, Concept development and testing, Product and marketing mix development, Market testing, Commercialization
How does the marketing process work?
Identify a market need. Conduct market research and develop a marketing plan. Identify target customers. Implement the marketing mix. Maintain good customer relationships.
What makes an effective mission statement?
If employees feel an owner's passion for the business through the mission statement, it has a positive impact.
The price of substitute goods affect supply curve?
If there are equally comparable goods available at a lower price, the supply of the more expensive good will be affected.
The small business investment company program
If venture capital is not available or suitable, an alternative is a small business investment company (SBIC) program. SBICs are private venture capital firms licensed by the SBA to make equity capital or long-term loans available to small companies.
What kind of training is appropriate for small business owners?
If you are currently in college, look for internship opportunities in your industry of interest. Most community colleges offer business classes for credit or noncredit community education classes that are taught by industry professionals.
Does it matter where a business is incorporated?
If you have a corporation with fewer than five shareholders or members, it's usually much easier and often less expensive to incorporate in the state where your business has a physical presence. For some larger businesses, it may be more advantageous to incorporate in a state that is historically more favorable to businesses.
How does Technology affect supply curve?
Improvements in technology enable suppliers to produce goods or services more efficiently and with fewer costs, thus increasing their ability to supply more.
Marketing and consumer issues
In addition to issues regarding truth in advertising, marketers must consider messages that may be manipulative, even if they contain no outright lies.
What do we mean by internal strengths?
In terms of marketing, a company's internal strengths refer to the competitive advantages or core competencies it has at its disposal to meet a specified marketing objective.
What risk does globalization poses for U.S. companies?
Increased competition from international companies. Fluctuations in the value of the U.S. dollar. Security and patent protection concerns. And Unstable political climates in foreign countries.
Changes in resource prices affect supply curve?
Increases and decreases in the price of the resources used to produce a good or a service affect the cost of their production. An increase in resource prices increases the cost of production and reduces profits, thus lowering the incentive to supply a product.
Population changes affect demand?
Increases in population create greater demand. Demographic changes also affect demand for certain goods and services.
How can businesses benefit by going green?
Increasingly, companies are attempting to reduce the impact they have on the environment.
What are the pros and cons of vertical organization?
Integrating functions and divisions is not always easy because communication and decisions have to travel up and down long chain-of-command lines. However, it has its benefits because there is ultimately one person in charge and a clear point of authority for decision making.
What are the political challenges to conducting international business?
International businesses look for nations that have stable governments because political upheaval can severely disrupt commerce and jeopardize the success of their firms. Government intervention in the process of determining which goods are undesirable and whether goods should be regulated, taxed, or banned also varies from country to country.
Why are interpersonal skills important for managers?
Interpersonal skills enable managers to interact with other people to motivate them and develop their trust and loyalty and get them to work together well.
How do investors and employees benefit from marketing?
Investors receive financial rewards for investing in successful organizations. Employees benefit from successful marketing because their jobs and livelihoods are more secure.
What does competition do?
It forces companies to improve their product offerings, lower their prices, promote their brands, and focus on customer satisfaction. Also, it weeds out less efficient companies and less desirable products from the marketplace.
What is a demand curve?
It illustrates the relationship between demand and price.
What challenges does CSR pose?
It is a challenge for modern business leaders to balance their need to respond to investors and produce a profit with their desire to alleviate human suffering. Nonetheless, some corporations manage to consistently balance the demands of social responsibility and successful business practices.
What are the advantages of franchising?
It is a proven system of operation. Franchisees benefit from the collective experience of the franchising company. There is strength in numbers. Franchisees might benefit from economies of scale achieved by purchasing materials, supplies, and services at discounted group rates. Initial training is part of the deal. Marketing support is provided. Market research is often provided.
How is a corporation structured?
It is composed of shareholders, a board of directors, corporate officers, first-line managers, and employees
Are there advantages to being tax-exempt?
It is exempt from paying most federal and/or state corporate income taxes and may also be exempt from state sales and property taxes.
What is a situational analysis?
It is similar to a SWOT analysis in that it includes an evaluation of internal strengths and weaknesses, as well as the opportunities and threats found in the external environment; however, it focuses on marketing only, rather than on the entire organization.
What happens when the research is completed?
It is usually presented in an organized manner to decision makers. The purpose of marketing research is to help managers make better marketing decisions.
What are some benefits of well-defined vision and mission statements?
Keeping management on track by ensuring strategies are consistent with the organization's goals, Inspiring employees, Giving investors insight into the values of the organization
Why study consumer behavior?
Knowledge of consumer behavior helps marketers select the most profitable target markets and guides the implementation, evaluation, and control of the marketing mix for selected targeted markets.
What kinds of businesses are best suited as an LLC?
LLCs may be a good choice for start-up businesses, not only for the tax benefits but also because it is easier to obtain financing because the number of investors (owners) is not restricted.
What are the disadvantages of franchising?
Lack of control, Start-up and ongoing costs, Workload, Competition, Share common problems
Do companies add value to their product line by merging?
Larger companies may acquire smaller companies for their innovativeness. A smaller company may agree to merge or be acquired if it feels it wouldn't have the opportunity to go public and couldn't survive alone otherwise.
What are the legal challenges to conducting international business?
Laws, regulatory standards, and access to unbiased judicial systems differ considerably around the world. No universal laws, regulatory standards, or global courts exist to settle disputes in the global economy. Different laws also govern the use of bribery throughout the world.
Beyond traditional entrepreneurs, WHAT are other categories of a entrepreneur?
Lifestyle entrepreneurs, Micropreneurs, Home-based entrepreneurs, Internet entrepreneurs, Growth entrepreneurs, Intrapreneurs, Social entrepreneurs and social intrapreneurs, Serial entrepreneurs
How does globalization affect the US economy?
Lowered production costs allow firms to lower the cost of products for consumers, yet people remain concerned about workers in the United States who lose their jobs to workers overseas.
How can a product's life be extended?
Lowering the price, Creating a new one, Finding a new market, Relabeling or repackaging the product, Creating a new vision
M-2 money supply:
M-1 plus savings deposits, money market accounts, and certificates of deposit (CDs) less than $100,000.
M-3 money supply:
M-1, M-2, and less liquid funds such as larger CDs, money market accounts held by large banks and corporations, and U.S. dollars deposited in banks outside the United States.
what steps can businesses can take to make sure employees get off to an ethical start:
Make sure a strict code of ethics and a meaningful and current mission statement are in place and communicated to employees. Offer orientation programs to new employees to inform them of ethical standards in place.
Managers vs Leadership
Managers spend their time making sure specific tasks are well done and completed on time. Leadership is focused on establishing the long-term vision and strategies a company will need to survive and flourish.
How can a business maintain its policy of ethical conduct in the workplace?
Managers talk regularly with employees about acceptable and unacceptable business practices and check to determine that the code of ethics is being followed. Some companies create a hotline for employees to anonymously report ethics violations. Companies can employ ongoing ethics training programs designed to boost awareness of their employees about ethics issues.
What time management skills does it take to succeed as a manager?
Managers who possess time management skills are able to be effective and productive with their time.
Exporting
Many firms initially enter foreign markets by exporting their products because it is relatively easy and inexpensive. It is not economical for heavy or bulky products with high transportation costs.
Environmental, health, and safety concerns
Many industries and even small companies make decisions every day that affect the environment and the safety of their workers or neighbors.
psychographic segmentation
Market segmentation based on lifestyles, personality traits, motives, and values
How does the global environment affect marketing?
Marketers need to be aware of cultural and social differences before launching their products and their marketing campaigns. Political landscapes with differing policies and regulations can also affect how a company does business in another country
How does marketing benefit consumers?
Marketers respond to needs in an effort to satisfy them, but sometimes they also can create. When needs are satisfied, utility is created.
What does the Marketing Department Do?
Marketing departments serve a variety of functions, including keeping an eye on what people want and then communicating these desires to the rest of the organization. Marketing departments help develop pricing strategies and persuade customers that their firms' products are the best. Marketing departments are also responsible for distributing products to customers at places and times most suitable to them.
How are cooperatives structured?
Members buy shares to help finance the cooperative, elect directors to manage it, and create and amend the by-laws that govern it.
Who generate tactical plans that specifically determine the resources and the actions required to implement particular aspects of a strategic plan?
Middle managers
What are some examples of minority groups in the US?
Minority groups might represent gender, culture, religion, sexual orientation, or disability and all groups must be treated fairly.
Are there disadvantages with mergers?
More than one-half of all mergers fail completely or don't live up to financial expectations. The primary culprit is poor integration following the transaction. Additionally, corporate cultures of the organizations may clash.
What causes excessive debt accumulation?
Most begin a new business by borrowing funds. If the new business does not generate revenue quickly enough to pay back the loans, the burden of paying the debt balance plus additional interest as well as normal operating expenses can cause an owner to become further entrenched in a potentially unrecoverable situation.
The North American Free Trade Agreement (NAFTA) Regional free trade agreement
NAFTA is an ongoing agreement to move the United States, Mexico, and Canada closer to true free trade.
The consumer buying process involves five steps:
Need recognition, Information search, Evaluation of alternatives, Purchase or no purchase decision, Post purchase evaluation
liability for sole proprietorship and partnership?
Neither a sole proprietorship nor a partnership will protect the owner(s) from unlimited risk.
What if I need more money than what I can provide myself?
New business owners sometimes borrow against their own assets, such as the equity in their homes or against their retirement accounts. Roughly half of all small businesses use bank loans and lines of credit as part of their financing strategies.
social media used in market research?
Not only can companies find out what is being said about their products, but they can also find out what is being said about the competition.
How can firms create business by acting ethically?
Offering clean fuel, Creating medical vaccines, Fighting censorship, Businesses Going Green
Ethical sourcing and procurement
Once a business considers purchasing materials from a supplier in a different country, it is tied to environmental and social concerns in that area.
How are the data analyzed and interpreted?
Once the data have been collected, they must be assembled into a format that can be easily analyzed and interpreted. The ultimate goal is to conduct careful analyses that will lead to conclusions about what marketing strategies to implement.
What role do personal ethics have in a business environment?
Our personal ideas of right and wrong influence our actions, words, and thoughts. Off-the-job behavior, integrity, and honesty relate to on-the-job performance.
How can planning help companies weather such unexpected events?
Part of contingency planning includes how a company will communicate, both internally and externally, with all of its stakeholders during a crisis. Contingency planning also involves determining what departments within a company are vital to the immediate needs of the organization when an unexpected crisis occurs. It is also important to ensure that the plans are tested and that key individuals know exactly what is expected of them.
four stages of business cycle?
Peak, Recession, trough, and Expansion or recovery
What do I need to do before I buy a business?
Perform due diligence—conducting a reasonable investigation into the business history, operating and financial records, contracts, and the valuation of the business.
What unique personal influences shape buying behaviors?
Personal influences on a buyer's consumption are often shaped by age, gender, economic situation, lifestyle, and personality.
Moral relativism
Perspective that holds that there is no universal moral truth; instead, there are only people's individual beliefs, perspectives, and values.
Is it possible to market a person?
Political parties market candidates for elected office, and we market ourselves when we interview for a job. Regardless of what is being marketed, the essence of marketing remains the same: delivering value to customers and managing customer relationships.
Having a strong and clear ethical policy helps a business in a number of ways:
Positive reputation in the marketplace with consumers, suppliers, and vendors, Recruitment and retention of talent, Efficiency increases when companies use materials resourcefully and minimize waste, Sales increase through new product innovations and environmentally and ethically conscious labeling
What are Complementary goods?
Products or services that go with each other and are consumed together, such as apps and iPhones
How do you classify operating supplies?
Products that facilitate production and operations but do not become a part of the finished product are classified as MRO products.
How do not-for-profit organizations market their products?
Rather than a product or a service, these organizations market an event, a cause, a place, or a person.
Ownership difference between an LLC and an S corporation?
S corporations are restricted as to the number of owners the company can have. LLCs can have an unlimited number of owners (called members) and members are not subject to other ownership restrictions imposed on S corporations. Perpetual life—When a member leaves an LLC, the LLC must dissolve.
How is an S corporation different from a C corporation?
S corporations do not pay corporate income taxes. Shareholders owe income taxes based on their proportionate share of the business
geographic segmentation
Segmenting markets according to geographic characteristics
What habits will give me the best chance to contribute to a team?
Seven Habits model
What happens to a corporation when an owner leaves?
Shares of ownership are easily exchanged, so the corporation will continue to exist should an owner die or wish to sell his or her interest in the business.
Advantages of partnership:
Sharing the costs of starting and running a business, Sharing management responsibilities and workload, Having a partner whose skills complement your own, Coming up with new ideas and projects and discussing major decisions
What kinds of workers do small businesses employ?
Small businesses account for most of the new jobs created in the economy. Small businesses also hire a larger proportion of younger workers, older workers, and part-time workers.
Social Media and Mobile Marketing with small businesses
Small businesses are finding that, compared to traditional advertising social networks, blogs, and mobile devices are more cost-effective ways to interact with, market to, and keep abreast of their customers. However, social media can also become problematic if not managed well. A well-thought-out technology plan is an important aspect of any business's overall strategy.
How do small businesses help consumers?
Small businesses directly provide consumers with specialized products and services and those goods and services larger businesses can't or don't want to provide.
Why are small businesses important to the economy?
Small businesses generate about 64 percent of net new jobs and nearly one-half of the U.S. gross domestic product.
How do small businesses help bigger companies?
Small businesses often operate in cooperative relationships with bigger businesses. They may make and supply parts that are required in large manufacturing processes and provide larger companies with new and better product designs.
How do small businesses foster innovation?
Small companies often introduce new products or procedures that large businesses do not have the flexibility, time, resources, or inclination to offer.
Is it possible to measure a company's CSR level?
Social audits, Ratings and rankings: Some organizations assess corporate responsibility and publish their findings; others provide corporate responsibility ratings and reports to consumers. Self-reporting: The practice of companies self-reporting their own efforts is becoming more prevalent, Corporate philanthropy: Many companies participate in corporate philanthropy, the practice of donating some of their profits or resources to charitable organizations.
How does society benefit from marketing?
Society benefits from successful marketing because scarce resources are more efficiently allocated or channeled into the production of those goods and services most desired by society.
Do specialized services have a separate classification?
Specialized professional services help support a firm's operations. These services include advertising, management consulting, legal, accounting, and information technology services
acronym SMARTER designing and wording goals, what does it stand for?
Specific, Measurable, Acceptable, Realistic, Timely, Extending, Rewarding
difference between an LLC and an S corporation with Stock transfer?
Stock in an S corporation is freely transferable. Ownership interest in an LLC generally requires the approval of other members.
How do entrepreneurs take risks?
Successful entrepreneurs recognize that they can influence events but do not have control over them, and know they may fail. They take calculated risks—they consider the likelihood of success before deciding whether to take a particular risk.
How are entrepreneurs innovative?
Successful entrepreneurs see problems to be solved or opportunities that aren't being addressed in the marketplace; they recognize opportunity niches. They also make improvements to existing products or systems, or they introduce something new and make profitable solutions out of problems.
Why do mergers and acquisitions occur?
Synergy, Achieving a greater competitive advantage is another reason. Often, companies join to become a more dominant force in their market.
Why does the government increase taxes to influence the economy?
Tax increases mean consumers spend less, which slows down the growth of businesses and the economy by reducing the amount of money in the system, and this lowers inflation. Decreasing taxes does not have the opposite effect because the amount of money entering the system depends on how much of the reduction in taxes consumers spend and how much they save.
What technical skills do managers need?
Technical skills include the abilities and knowledge that enable employees to carry out the specific tasks required of a discipline or a department. Managers must also know how to perform or at least have a good understanding of the skills required of the employees they supervise.
Factors that can create a change in supply are known as determinants of supply (shifts in curve) and include:
Technology changes, Changes in resource prices, Price expectations, The number of suppliers, and The price of substitute goods.
How has technology affected new small businesses?
Technology creates new business opportunities and new ways to conduct business.
What benefits does technology provide to business?
Technology, when used and implemented effectively, can help streamline businesses and cut costs.Companies can also use new technology systems to increase productivity.Technology makes it possible for employees to telecommute, or work from home or another location away from the office.
Does the CPI measure the change in price of all goods?
The CPI measures the change in prices of consumer goods only.
The European Union (EU) Regional free trade agreement
The European Union is the oldest and largest free trade area, with membership of 28 countries. It is the largest exporter in the world and the second-largest importer.
Where do small business owners go for advice?
The Small Business Administration (SBA), an independent agency of the U.S. government, offers assistance in the legalities associated with beginning and operating a business, as well as education and training, financial assistance, disaster assistance, and counseling. Service Corps of Retired Executives (SCORE) offers workshops and counseling to small businesses at no cost. There are other mentoring sources available, including the Entrepreneurs Organization (EO).
Why aren't there many monopolies?
The U.S. Federal Trade Commission (FTC) and the Department of Justice must review mergers between large competitors to determine whether the combined firm would result in a monopoly that would thwart competition. [Anti-Trust Laws]
What is the actual product?
The actual product is the tangible aspect of the purchase that you can touch, see, hear, smell, or taste. It provides core benefits when it is used.
How does the aging population affect business?
The aging U.S. population presents opportunities for businesses but it also presents challenges for the U.S. economy. Potential problems include funding entitlement programs such as Social Security and Medicare. Caring for the needs of an older population presents growth opportunities for businesses, especially retirement centers, healthcare, pharmaceutical companies, and the travel industry.
What is the augmented product?
The augmented product consists of the core product and the actual product plus other real or perceived benefits that provide additional value to a customer's purchase.
What are the pros and cons of horizontal organization?
The benefit of a horizontal organization is that each team has more responsibility for the outcome of its work. Because there are fewer layers of managers, approvals from them can be sought and received much faster. Horizontal structures have been deemed the model for the knowledge age.
Why wouldn't I want to begin my business as a sole proprietorship?
The biggest disadvantage is exposure to personal liability.
corporate culture (the character of an organization)
The collection of values, norms, and behavior shared by managers and workers in a firm defines it
What influences consumer decision making?
The consumer decision-making process is part of a broader environmental context that influences each step.
What is the core product?
The core product is the primary benefit or service that satisfies the basic need or want that motivates a consumer's purchase.
How does an S corporation handle personal liability?
The corporate structure provides some limitations on personal liability of the owners, although it does not assume liability for an owner's personal wrongdoings.This is true for any corporate structure—whether it is a C corporation, an S corporation, or a limited liability company.
Why is analyzing the competition important?
The degree of competition impacts a firm's marketing strategies. A company operating in a monopolistic competitive environment will have a different marketing strategy than one operating in an oligopoly.
What are the differences between B2C markets and B2B markets?
The difference hinges on who's doing the buying. If a good or a service is purchased in a B2B market, it is purchased by a business for further processing, for resale, or to facilitate general business activity.
Why look to the external environment?
The dynamic and ever-changing external environment offers many opportunities and creates many threats. Changes in the degree of competition facing firms, the economy, technology, and sociocultural forces, as well as changes in the global, political, and regulatory environments, have caused some firms to thrive while others suffer.
How does the economic environment affect a marketing strategy?
The economic environment, including inflation, interest rates, unemployment, economic growth rates, and consumer confidence levels, can affect a firm's marketing strategies in many ways. Because of globalization, prudent firms follow global economic trends as well.
business cycle
The economy naturally cycle of periodic increases and decreases
How does CSR affect society as a whole with Effects on employee morale?
The ethical culture of a company and its leadership has effects on its workers.
Price expectations affect supply curve?
The expected future price of a product will affect how much of it producers are willing to supply. If prices are expected to increase in the future, a supplier might stockpile the product and supply more at a later time when prices are higher. If prices are expected to decrease, the supplier might attempt to sell its supply while prices are high.
What goods and services are included in the CPI?
The expenditure items fall into eight major groups: apparel, education and communication, food and beverages, housing, medical care, recreation, transportation, and other goods and services
Maslow hierarchy of needs physicological to self-actualization:
The first needs are termed physiological needs, such as the need for water, food, sleep, and reproduction. Once physiological needs have been met, people strive to satisfy their safety needs, such as establishing safe and stable places to live and work. Once these needs have been met, people try to meet their social or belongingness needs. This includes the need to belong to a group and feel accepted by others.
Why is it important to define the marketing needs or opportunity?
The first step in conducting marketing research is to define the problem, which may involve more research to further identify or enhance the perceived need or opportunity. Marketing managers and researchers work together to determine what kind of data need to be gathered and how.
How does government spending help stimulate the economy?
The government spends money on a wide variety of projects, such as infrastructure improvements and projects that benefit the military, education, and health. This increases the cash flow in the economy faster than decreasing taxes does and also creates additional jobs, which also helps stimulate the economy.
How does CSR affect society as a whole with Economic effects?
The long-term consequences of businesses implementing a strong CSR plan have an impact on prices, product availability, and product quality.
What was the marketing era of marketing?
The marketing era changed the focus from finding the right customer for a product to producing the right product for a customer and doing it better than the competition.It also focuses on aligning all functions of the organization to meet or exceed the customer's need by providing superior products and customer service and satisfying customers over the long term.
Why is the money supply important?
The more money we have, the more we tend to spend. As consumers spend more, businesses do better, increasing demand for resources, labor, and capital, and the economy improves. However, when the money supply continues to expand, there may not be enough goods and services to satisfy demand and it may result in inflation. When the economy begins to slow down due to decreased spending, either disinflation or deflation results. The Fed uses three tools to affect money supply: reserve requirements, short-term interest rates, and open market operations.
What special challenges do local and regional businesses face?
The most common challenge is managing money. Poor financial planning and unfavorable economic conditions can lead to bankruptcy. Business owners also have to take taxes and insurance costs into consideration, such as health insurance and liability insurance.
Marketing mix: Product
The perfect product is one that provides value for the customer. Product differentiation is the creation of a real or perceived difference in a product designed to attract customers.
What is the market price for a good or service?
The price at which everyone who wants the item can get it—without wanting more or without any of the items being left over.
Marketing Mix Price:
The price has to be high enough for a firm to profit from it but low enough to appeal to customers.
Officers and line managers
The primary lineup of officers elected by a corporation's board of directors includes the firm's CEO, CFO, and COO.
Directors and corps
The shareholders elect the board of directors, and the members of the board select and hire the business's management team of corporate officers. Major financing and business decisions are also made by the board of directors.
How is the tactical plan translated into instructions for employees?
The specifics of carrying out tactical plans are operational plans.
The number of suppliers affect supply curve?
The supply of a good or a service increases as the number of competitors increases.
What are the benefits and costs of international trade?
The theory of comparative advantage indicates that countries that participate in international trade will experience higher standards of living because of the greater quantity and variety of higher-quality products offered at lower prices. The costs of international trade are borne by those businesses and their workers whose livelihoods are threatened by foreign competition.
What is McClelland's "three needs" theory?
The three needs theory suggests that there are three main motivators: The need for achievement—to accomplish something difficult on your own. The need for affiliation—to form close personal relationships. The need for power—to be able to control the behavior of others. Although an individual may have multiple needs, McClelland suggests that one tends to be dominant over the others.
How is a product's value measured?
The value of a product equals the ratio of a product's benefits to its costs.
Can any business elect to be an S corporation?
There are certain qualification requirements, including: The company must not have more than 100 shareholders. Shareholders must be U.S. citizens or residents. The company must issue only one class of stock. The company must proportionately distribute profits/losses to each shareholder based on each one's interest in the business.
Can a business have the protection of a corporation but not pay corporate taxes?
There are other forms of business structures in which owners can protect themselves from personal liability and have the income of their businesses flow through to their individual tax returns so they don't face double taxation: the S corporation and the limited liability company.
Administrative trade barriers
These are government rules designed to limit imports.
Why are price indices important?
They measure purchasing power and consequently trigger business decisions. During periods of increasing prices, consumers' purchasing power decreases. As a result, wages increase to compensate for the higher cost of living, and businesses must eventually increase the prices of their products to offset higher labor costs, again decreasing the consumer's purchasing power.
Companies that are attempting to recover from scandal often follow some common strategies:
They work to find a leader who will set an example of the new ethical image of the company, They restructure their internal operations to empower employees to consider the ethical implications of their decisions and feel free to speak up when they spot a concern, They redesign internal rewards.
Marketing MIx Place (or distribution)
This component of the marketing mix refers to all the methods involved in getting a product into the hands of customers. Many goods go through a distribution channel—a series of firms or individuals that participate in the flow of a product from the manufacturer to the consumer. These middle players are sometimes called distributors or wholesalers.
What is a franchise?
This is a method of doing business whereby the business (the franchisor) sells a company's products or services under the company's name to independent third-party operators (the franchisees).
reserve requirement
This is determined by the Fed, is the minimum amount of money banks must hold in reserve to cover deposits.
Cyclical unemployment
This occurs when firms must cut back their workforces when there is a downturn in the business cycle.
Seasonal unemployment
This occurs when workers get laid off during the off-season or after the holiday shopping season ends.
How does the government control swings in the business cycle?
To smooth out the swings in the business cycle, lawmakers use fiscal policy to determine the appropriate level of taxes and government spending.
Common reasons businesses fail include:
Too much accumulation of debt, Inadequate management, Poor planning, Unanticipated personal sacrifices. nearly one-fourth of all startups fail in the first year, two-thirds survive only two years, and just over half survive after five years of operation. New businesses may also fail when their new owners do not adequately anticipate the many personal sacrifices—financial time and otherwise—they are forced to make.
Who benefits and who suffers from protectionist trade barriers?
Trade barriers benefit domestic producers and their workers but hurt domestic consumers.Trade barriers increase costs to foreign companies or restrict the supply of imports, driving up prices and reducing sales in the domestic market.Trade barriers also hurt consumers because the overall quantity, variety, and quality of products are lower as a result of curtailing foreign competition.
What elements are included in the marketing mix?
Traditionally, there have been four elements in the marketing mix, known as the four Ps: product, price, promotion, and place.
specialty goods and services
Unique or specialized products for which buyers are willing to spend a considerable amount of time and effort searching
How are products that are used to make other products classified?
Unprocessed materials that are sold in their original form before being processed for use in other products are examples of raw and processed materials.
How is an economy defined by?
What is produced, How it is produced, and Who gets the finished product
What is the discount rate?
When commercial banks borrow funds from the Fed, they are charged an interest rate called this. The Fed has the power to increase or decrease the discount rate in its efforts to control money supply
Turnkey projects
When firms export their technological know-how in exchange for a fee
What was the sales era of Marketing?
When supply exceeded demand for most products and competition for customers became more intense, businesses focused on selling existing products and used aggressive sales tactics to "push" them. Companies also began advertising heavily in all available forms of media.
The demand curve shifts to the left
When there is a negative change in income levels, Population changes, Consumer preferences, Complementary goods, and Substitute goods (also price).
demand curve shift to the right
When there is a positive change in income levels, Population changes, Consumer preferences, Complementary goods, and Substitute goods (also price).
A strategic plan helps to answer three questions:
Where is the company going? What should the company focus on? How will the company achieve its goals?
Shareholders and corp
Whether or not a corporation is privately owned or publicly owned, it has shareholders (or stockholders) who have an ownership interest in the company.
Does a company's organizational structure ever change?
Yes, sometimes when companies have grown so large that their product lines, geographic regions, or manufacturing processes can become difficult to manage, so the firms restructure from a vertical organization to a horizontal one.
mixed economies
a blend of market and planned economies
cooperative is
a business not owned by investors but rather governed by members who use or benefit from the products or services provided by the organization.
sole proprietorship is
a business owned (and usually controlled) by a single individual.
A not-for-profit organization (or nonprofit organization) is
a business that does not seek a profit. After paying normal operating expenses, it uses remaining revenue for the business's declared cause and mission rather than paying stockholders.
A marketing objective is
a clearly stated goal to be achieved through marketing activities. It should be realistic, quantifiable, and time specific.
A network organization is
a collection of independent, mostly single-function firms that together produce a product or service, instead of one company being responsible for all functions.
Social class refers to
a combination of factors, such as education, income, wealth, and occupation, common to a group of people.
What do businesses do with their profits?
a company can reward its employees, increase its productivity, or expand its business.
When evaluating a company's internal strengths and weaknesses, what resources do managers have to analyze?
a company's internal resources.
Corporate social responsibility (CSR)
a company's obligation to conduct its activities with the aim of achieving social, environmental, and economic development.
A publicly owned corporation is
a corporation regulated by the Securities and Exchange Commission (SEC) because the shares of ownership can be traded on public stock exchanges.
Currency depreciation is
a decrease in the exchange rate of a nation's currency; exports become cheaper and imports become more expensive.
A mission statement is
a description of an organization's current purpose, basic goals, and philosophies. A mission statement not only helps management remain focused but also lets employees understand the core values of the company.
A limited liability company (LLC) is
a distinct type of business that combines the corporate advantages of limited liability with the tax advantages of sole proprietorships and partnerships. LLCs do not issue stock; rather, each member's ownership is determined by the value of his or her capital account (the member's contributions to the LLC).
A wholly owned subsidiary is
a facility owned entirely by the investing firm.
oligopoly
a form of competition in which only a few sellers exist and each seller has a fairly large share of the market.
business plan is
a formal document that states the goals of the business as well as the plan for reaching those goals.
Group flow occurs when
a group knows how to work together so that each individual member can achieve flow.
advisory board
a group of individuals who offer guidance to the new business owner. It is similar to a board of directors in a publicly held company except it generally does not have the authority to make decisions.
entrepreneurial team is
a group of qualified individuals with varied experiences and skills who come together to form a new venture.
A product line is
a group of similar products marketed to one general market.
quota
a limitation on the amount of an import allowed to enter a country.
Utility
a measurement of usefulness that a consumer obtains from any good.
corporation is
a specific form of business organization that is legally formed under state laws. most corporations are structured as a C corporation, which refers to Subchapter C of the Internal Revenue Code by which it is governed.
The target market
a specific group of potential customers on which a firm focuses its marketing efforts.
code of ethics, also called a code of conduct,
a statement of their commitment to certain ethical practices.
economic indicator
a statistic about an economic activity.
strategic plans vs tactical plans focus?
a strategic plans has a long-term focus, tactical plans are made with a one- to three-year horizon in mind.
social audit
a study of how well a company is meeting its social responsibilities.
A market segment is
a subgroup of potential customers who share similar characteristics and therefore have similar product needs and preferences.
Strength-based management is
a system based on the belief that, rather than improve employees' weak skills, the best way to help them is to determine their strengths and build on them.
tariff
a tax imposed on an imported good or service.
A product life cycle is
a theoretical model describing a product's sales and profits over the course of its lifetime.
embargo
a total restriction on an import or an export.
A matrix organization is
a type of structure in which people are pooled into groups by skills and then assigned to projects as needed.
Currency
a unit of exchange for the transfer of goods and services and provides a consistent standard.
A marketing plan is
a written document that specifies the marketing activities that will take place to achieve organizational objectives.
Visionary leaders are
able to inspire others, believe in their own vision, and move people toward a shared dream.
Regional free trade agreements
abolish trade barriers among member countries.
The total product offer consists of
all the benefits associated with a product that impacts a consumer's purchasing decision.
Equipment, also known as capital items, includes
all the physical facilities of a business.
Licensing is
an agreement in which the licensor's intangible property—patents, trademarks, service marks, copyrights, trade secrets, or other intellectual property—may be sold or made available to a licensee in exchange for a royalty fee.
A SWOT analysis is
an analysis of the strengths, weaknesses, opportunities, and threats a company is facing.
Communism (type of Planned Economic System)
an economic system in which a state's government makes all economic decisions and controls all social services, as well as many of the major resources required for the production of goods and services.
Capitalism (type of market economy)
an economic system that allows freedom of choice and encourages private ownership of resources required to make and provide goods and services.
whistle-blower
an employee who reports misconduct, most often to an authority outside the firm.
Currency appreciation is
an increase in the exchange rate of a nation's currency, causing the relative price of imports to fall and the relative price of exports to rise.
Expectancy theory suggests
an individual's motivation can be described by the relationship between three psychological forces: Expectancy is the idea that a person's effort has an appreciable effect on a situation's result—whether it is a success or failure. Instrumentality refers to the idea that the outcome of a situation results in rewards or punishment. Valence is the importance that the individual places on the expected outcome of a situation. According to expectancy theory, Expectancy × Instrumentality × Valence = Motivation
total quality management (TQM),
an integrated approach that focuses on quality from the beginning of the production process up through the final monitoring to detect and correct problems.
social environment
an interconnected system of demographic factors such as race, ethnicity, gender, age, income distribution, sexual orientation, and other characteristics.
A product is
any good or service that might satisfy a want or a need.
Labor
any physical or intellectual work (ideas and knowledge) that people contribute to a business's production.
entrepreneur
assumes the risk of creating, organizing, and operating a business and directs all of a business's resources.
Operating with a network structure requires that companies:
be highly flexible and innovative, be able to respond quickly to threats and opportunities
customer relationship era
began In the late 1990s, and organizations began focusing on continuing to satisfy customers over the long term by pleasing them after the sale.
Societal marketing
began in the late 1960s and early 1970s, challenged companies to work for the benefit of both consumers and society.
Unethical behavior
behavior that does not conform to a set of approved standards of social or professional behavior.
What is a successful business?
benefits both the owner and society because they offer desired goods and services, provide employment, and generate income and spending in the economy.
Goals are
broad, long-term accomplishments an organization wants to achieve within a certain time frame.
Social intrapreneurs
build and develop ventures within a company that are designed to identify and solve large-scale social problems.
In business-to-business (B2B markets),
businesses purchase goods and services from other businesses.
multinational enterprises
businesses that manufacture and market products in two or more countries
open market operations
buying and selling U.S. Treasury and federal agency bonds on the "open market." primary tools the Fed uses in its monetary policy.
Importing
buying products from other countries.
The cheap foreign labor argument
centers on lower wages paid to workers of foreign companies and how domestic companies can compete with these low wages.
The national security argument states
certain industries critical to national security should be protected from foreign competition.
A master limited partnership (MLP)
combines the tax benefits of a limited partnership but is publicly traded on a securities exchange.
When the Fed lowers the discount rate
commercial banks are encouraged to obtain additional reserves by borrowing funds from the Fed and then lending those reserves to businesses, thereby stimulating the economy.
Multinational enterprises
companies that have operations in more than one country
Legal compliance
conducting a business within the boundaries of all the legal regulations of that industry.
Marketing MIx Promotion
consists of all the methods used to inform customers about product's benefits and persuade them to buy it. They are also used to build positive customer relationships.
What is E-commerce?
consists of three different kinds of business trade: business-to-consumer (B2C), business-to-business (B2B), and consumer-to-consumer (C2C). B2C interactions take place between a business and a consumer. B2B interactions involve the sale of goods and services from one business to another. C2C transactions have become possible through consumer-driven storefronts where individuals offer goods directly for sale to customers.
Strategic alliances are
cooperative arrangements between actual or potential competitors. Unlike a joint venture, in a strategic alliance each partner retains its business independence.
Internet entrepreneurs
create businesses that operate solely online.
General Agreement on Tariffs and Trade (GATT)
created in 1948 successfully reduced tariffs and other obstacles to free trade on goods.
How a CPI measures price changes?
creating a "market basket" of a specific set of goods and services that represent the average buying pattern of urban households.
nonconvertible currency,
currency which cannot be exchanged for another currency. *developing countries typically have this
multidomestic strategy of international business
customize or differentiate their products to meet unique local needs, tastes, or preferences.
Secondary data
data that have already been collected and processed.
Recession
decline in the GDP for two or more successive quarters.
A democratic leader
delegates authority and involves employees in the decision-making process.
shortage
demand exceeds supply
Psychological influences include
differences in a buyer's motivation, perception, attitudes, and learning.
Not-for-profit organizations
do not pursue profits for its owners, but instead seek to service the community through social, educational, or political means.Profits are used to further the organization's causes by expanding the services they provide.
general partnership
each partner has unlimited liability for the debts and obligations of the partnership and each is liable for his or her own actions, as well as the actions of the other partners and the actions of any employees.
profit
earned when a company's revenue, the money it brings in, exceeds its expenses, the money it pays out.
market economy
economy where individuals are more able to make their own economic decisions.
Intrapreneurs are
employees who work in an entrepreneurial way within an organizational environment.
Businesses
entities that offer products and services to their customers in order to earn a profit.
Social entrepreneurs are
entrepreneurs who create innovative solutions designed to solve social problems.
Home-based entrepreneurs are
entrepreneurs who run their businesses out of their homes.
The marketing environment includes
environmental influences beyond a firm's control that constrain its ability to manipulate its marketing mix. These influences include the competitive, economic, technological, and sociocultural environments as well as the global, political, and regulatory environments
situational ethics
ethics system whereby people make decisions based on a specific situation instead of universal laws.
Niche markets are
even more narrowly defined.
Dumping refers to
selling a product at a price below its cost in a foreign country to drive competitors there out of business so you can take over the market.
What can a manager do to enhance employee motivation?
extrinsic motivators, such as pay, promotion, and verbal praise. Other factors, called intrinsic motivators, are beyond a manager's control because they are internal to each employee.
Stating business with Grants. What are they?
financial awards that are usually offered by federal and state governments and some private organizations.
who carry's out operational plan,
first-line managers precisely determine the process by which tactical plans can be achieved.
Joint ventures are
formed when two firms team up to better take advantage of a business opportunity than either one of them could alone. The two companies share the costs and risks of developing and selling the product the joint venture has to offer.
Limited partnership with General partners are
full owners, are responsible for day-to-day business decisions, and remain liable for all debts and obligations of the business.
The threat of retaliation (or the bargaining chip) argument says that,
if a trading partner increases its trade barriers on your exports or fails to reduce trade barriers when you reduce yours, then an uneven playing field is created.
Unlimited liability means
if business assets aren't enough to pay business debts, then sole proprietor's personal assets can be used to pay the balance.
enterprise zones
geographic areas targeted for economic revitalizing. Businesses receive generous tax benefits for locating and hiring in these enterprise zones.
Consumer products are
goods and services purchased by households for personal consumption.
Technology
goods and services such as computers and software that make businesses more efficient and productive.
Business-to-business (B2B) products (sometimes called industrial products) are
goods and services that are purchased by businesses for further processing or resale or for use in facilitating business operations.
Sovereign wealth funds (SWFs) are
government investment funds that are managed separately from the official currency reserves of the country.
subsidy
governments make payments to domestic producers.
organization chart shows
how groups of employees fit into the larger organization structure. It is a visual representation of several ideas that reflect the structure of the company.
Supply
how much of a product or service is available. It is derived from a producer's desire to maximize profits.
Demand
how much people want to buy at any given time.
Middle managers manage
individual divisions or segments of an organization and are responsible for creating the specific plans to implement the strategic vision set by the firm's top managers.Included in this management layer are division managers of the firm's functions, such as finance, marketing, sales, operations, and information technology, and team leaders who are responsible for cross-functional groups of employees.
In business-to-consumer (B2C) markets,
individuals purchase goods and services for personal consumptions.
staff departments
interact with and advise other departments but do not have authority over them. This more complex set of managerial relationships is called line and staff organization.
Limited partnership with Limited partners are
involved as investors, do not actively participate in day-to-day business decisions, and are personally liable only up to the amount of their investment.
When the Fed increases the discount rate
it discourages banks from borrowing additional reserves and lending to businesses.
What happens if the Fed increases the reserve requirement?
it forces banks to hold on to more money rather than lending it out, slowing down economic activity.
what is a partnership
it is a type of business structure in which two or more entities (or partners) share the ownership and the profits and losses of the business.
What happens when the Fed buys or sells U.S. securities
it is changing the level of monetary reserves in the banking system by adding or taking away money from the system
How does the social environment affect your life?
learning from people who are different from you, embracing diversity, and finding ways to make your lifestyle more eco-friendly.
groupthink
narrow-mindedness within the group
Lifestyle entrepreneurs
look for more than profit potential; they also look for freedom from corporate bureaucracy, flexibility, or the ability to work at home.
What categorizes a company as multinational (or international)?
make and/or sell products in several countries. They provide goods or services to international consumers or serve only one country but have suppliers or production facilities in other countries.
An autocratic leader
makes decisions without consulting others.
Theory Z style
management offers long-term employment with an emphasis on individual responsibility.
an inverted organization,
managers must answer, or be accountable, to their employees.
Demographic segmentation is
market segmentation according to age, race, religion, gender, ethnic background, and other demographics.
Behavioral segmentation is
market segmentation based on certain consumer behavior characteristics, such as brand loyalty, price sensitivity, benefits sought by a product, occasions that stimulate purchases, and ways in which a product is used. Brand loyalty is another kind of behavioral segmentation
Gross domestic product (GDP)
measures how productive a nation is; that is, the overall market value of final goods and services produced in a country in a year. The broadest measure of the health of any country's economy. Only those goods that are actually produced in the country are counted in the country's GDP.
unemployment rate
measures the number of workers who are at least 16 years old, are not working, and who have tried to find jobs within the past four weeks.
Productivity
measures the quantity of goods and services that a firm's human and physical resources can produce in a given time period.
virtual team
members are located in different physical locations but work together via telecommunications technology to achieve a goal.
cross-functional team
members are selected across a range of critical functional divisions of a business.
What is the Seven Habits model?
model that organizes skills that you can build to enhance your success as a member of a team. seven habits are; Be proactive. Begin with the end in mind. Put first things first. Think win-win. Seek first to understand and then to be understood. Sharpen the saw.
How does the monetary policy manage the economy?
monetary policy, which is exercised by the Federal Reserve System (the Fed), the central banking system of the United States. It includes 12 regional Federal Reserve Banks, a Board of Governors, and the Federal Open Market Committee, which sets the policies of the Fed. Through its monetary policy, the Fed affects the nation's money supply and helps shape the direction of the economy.
Financial capital
money used to facilitate a business enterprise.
Affiliative (or laissez-faire) leaders are
more advisory in style, encouraging employees to contribute ideas rather than specifically directing their tasks.
Globalization
movement toward a more interconnected and interdependent world economy. Economies around the world are merging as technology, goods and services, labor, and capital move back and forth more easily across international borders.
What special challenges do multinational corporations face?
must be familiar and comply with the laws of the countries in which they operate. Cultural differences such as language barriers, values, and customs relating to business etiquette also have an impact.
Peak
occurs when an economic expansion is at its most robust point.
A trough
occurs when the recession hits bottom and the economy begins to expand again.
transnational strategy of international business
offer a product globally, to many countries, working simultaneously to sell it at the lowest possible price.
An acquisition occurs when
one company completely buys out another company.
An unfriendly acquisition occurs when
one company tries to purchase another company against the wishes of its shareholders or managers. These are referred to as hostile takeovers. The acquiring firm makes a tender offer, an offer to buy the target company's stock at a price higher than its current value in order to persuade the shareholders of the target company to sell their stock.
line organization is where
one position has direct control of all the departments under it.
Small Business Administration (SBA) defines a small business as
one that is independently owned and operated and not dominant in its field of operation.
duopoly
only two suppliers exist, or only two firms dominate a market. [Boeing and AirBus]
Marketing mix influences include
putting forth a product that buyers want at an affordable price, promoting awareness of the attributes of that product, and placing the good or service in a timely and convenient location for consumers to buy.
Business incubators are
organizations that support start-up businesses by offering administrative services, technical support, business networking, sources of financing, and so on.
Privately held (or closed) corporations are
owned, in most cases, by the company's founders, a management team or a group of private investors, and shares are not traded on public stock exchanges.
income levels increase
people are able to buy more products.
income levels decrease
people cut back on spending and buy fewer products.
The Theory X model
people inherently dislike work and want to avoid it.
The Theory Y model
people view work as being as natural as playing and resting.
Entrepreneurs are
people who assume the risk of creating, organizing, and operating a business.
first-line managers,
people who directly supervise lower-level employees, help run the business if the companies are large enough and the responsibilities of each officer are demanding enough.
Structural unemployment
permanent unemployment that occurs when an industry changes and jobs are terminated completely.
The process of developing a unique marketing mix that best satisfies a target market is known as
positioning.
In a horizontal organization (or a flat organization),
power is distributed, with many people organized in teams or groups. Decision making is decentralized and spread out across many more people.
equilibrium (market) price
price at which supply equals demand
Maslow hierarchy of needs
primary needs must be met first, before higher-level needs can be addressed
Personal ethics
principles that guide the decisions you make in your life.
Intellectual property
privately owned, intangible assets developed as a result of people's intellect and creativity. Examples include patents, copyrights, and trademarks.
Unsought goods and services are
products buyers don't usually think about buying, don't know exist, or buy only when a specific problem arises.
Primary data
raw data collected by a researcher, through observation, surveys, focus groups, interviews, customer feedback, samples, and controlled experiments. A focus group is typically a group of eight to ten potential customers who are asked for feedback on a good or service, an advertisement, an idea, or a packaging style.
Natural resources
raw materials provided by nature that are used to produce goods and services.
Hawthorne effect is what
regardless of the experimental changes made, the production of the workers improved because it was based on the attention the workers were receiving.
offshoring
relocating their production facilities overseas or subcontracting components to foreign companies to achieve lower manufacturing costs.
World Trade Organization (WTO)
replaced GATT in 1995 and has strengthened the world trading system by extending GATT rules to services and increasing the protection for intellectual property rights. It has taken on the responsibility for arbitrating trade disputes and monitoring the trade policies of member countries.
The chief financial officer (CFO)
reports directly to the CEO and is responsible for analyzing and reviewing the financial data, reporting financial performance, preparing budgets, and monitoring expenditures and costs.
Shopping goods and services
require more effort and time for comparison and are typically purchased less frequently than consumer goods. These are typically durable good—goods that can be used repeatedly over a long period of time.
local content requirement
requires that some portion of a good be produced domestically.
factors of production
resources used to create goods and services
Does it matter how many products are in a product line?
roduct line length and product mix width are the result of companies striving to offer differentiated products to satisfy targeted customers.
Aesthetics refers to
what is considered beautiful or in good taste; it affects a culture's etiquette, customs, and protocol.
global strategy of international business
sell a standardized (or homogenous) product across the globe. Standardized products are basic products that meet universal needs.
Franchising involves
selling a well-known brand name or a proven method of doing business to an investor in exchange for a fee and a percentage of sales or profits.
Exporting
selling domestically produced products to other countries.
National business
serves the country and provides goods and services to virtually all U.S. residents. They do not serve an international market.
Objectives are
short-term targets designed to help achieve the goals.
Time utility
when a business makes a product available at a time when it is most needed
A buyer's culture, subculture, social class, family, and peers compose the
sociocultural influences that affect buying decisions.
theory of comparative advantage state?
specialization and trade among countries benefit all who are involved. Each country should specialize in the production of those products for which it possesses a comparative advantage. When all countries focus on producing products for which they have a comparative advantage, collectively they all have more production to share.
opportunity niche
start a business to satisfy a need in the market that is not being adequately fulfilled
Micropreneurs
start their own businesses but are satisfied with keeping their businesses small in an effort to achieve a balanced lifestyle.
Leading indicators
statistics that can be used to help predict how the economy will do in the near future. [example???]
Lagging indicators
statistics that change only after the economy as a whole changes.
Coincident indicators
statistics that reflect how the economy is currently doing.
When does Undercapitalization occur?
when a business owner cannot gain access to adequate funding.
Growth entrepreneurs
strive to create fast-growing businesses and look forward to expansion.
Microeconomics
study of how individual businesses, households, and consumers make decisions to allocate their limited resources in the exchange of goods and services.
Economics
study of how individuals and businesses make decisions to best satisfy wants, needs, and desires with limited resources.
Macroeconomics
study of the behavior of the overall economy.
balance of payments
summarizes all transactions (payments, financial aid, and gifts) that take place between residents of a country and the external world.
first-line managers
supervise individual employees who carry out the day-to-day operations of a company. bottom of the managerial pyramid
surplus
supply exceeds demand
economy
system that tries to balance the available resources of a country, such as land, capital, and labor, against the wants and needs of consumers.
merger
takes place when two companies come together cooperatively to form one company.
Frictional unemployment
temporary unemployment that results when workers move among jobs, careers, and locations.
comparative advantage
that is, produce the goods and services it can produce relatively more efficiently compared to other countries.
To decrease the federal funds rate
the Fed buys bonds in the open market, increasing banks' excess reserves and making more money available.
To increase the federal funds rate
the Fed sells bonds in the open market, and banks buy the securities, reducing their excess reserves available for loans.
absolute advantage
the ability to produce more of a good or service than any other country.
proxy fight
the acquiring company tries to persuade the shareholders of the target company to vote out the firm's existing managers and replace them with managers who are sympathetic to the goals of the acquiring company.
A leveraged buyout (LBO) occurs when
the acquiring group in a takeover borrows the funds necessary for the acquisition, using the assets of the acquired company of collateral.
Marketing is
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.
What is the law of supply
the amount supplied will increase as the price increases; if the price is lower, then less of the product is supplied.
Outsourcing
the assignment of certain tasks, such as production or accounting, to an outside company or organization.
Ethnocentrism is
the belief that one's own culture is superior to all other cultures, making succeeding in international business very difficult.
Venture capital funding is generally sought when
the business is more mature and needs large sources of capital to take the business to the next step.
A product mix is
the combination of all product lines offered for sale by a company.
The marketing mix
the combination of controllable elements of a product's marketing plan designed to serve the target market.
money supply
the combined amount of money available within an economy.
Judeo-Christian ethics
the common set of basic values shared across both Jewish and Christian religious traditions, such as respecting property and relationships and being kind to others.
Culture is
the complex set of values, behaviors, lifestyles, arts, beliefs, and institutions of a population that are passed on from generation to generation.
two price indices that are used as economic indicators:
the consumer price index and the producer price index. When there is a consistent increase in either indicator indicates inflation.
privatization
the conversion of government-owned production and services to privately owned, profit-seeking enterprises.
When marketers plan a total product offering, they think about the product on three levels:
the core product, the actual product, and the augmented product.
Top managers are
the corporate officers and are responsible for an organization as a whole. They develop the "big picture" for a company: its long-term goals and strategic vision.
The chief operating officer (COO) is responsible for
the day-to-day operations of the organization and reports directly to the CEO.
Departmentalization consists of
the decisions made to structure the company into smaller groups.
what are some examples of Socioeconomic factors
the demographics of population density, age distribution, income distribution, ethnicity, and the cultural behaviors of a community.
Synergy is
the effect achieved when two companies combine, in which the result is better than each company could achieve individually. It is achieved by combining resources that could not have been created independently by either party.
What is a Supply Chain?
the flow by which products, information, and money move between a supplier and a consumer.
freely floating (or flexible) exchange rate system,
the global supply and demand for currencies determines exchange rates. The problems are that they can create relative price changes outside the control of international businesses and engender risks of losses due to rapid and unexpected changes in exchange rates.
Planned economic system
the government plays a significant role in determining the goods and services produced and distributed.
equity theory
the idea that people expect to be rewarded on par with other people they feel their performance equals or else their performance will suffer.
federal funds rate
the interest rate that banks charge other banks when they borrow funds overnight from one another. Fed does not control the federal funds rate directly. The rate is the equilibrium price created through the Fed's open market operations and the exchange of securities.The excess reserves that are available to lend among banks come from securities that the Fed buys and sells through its open market operations.
A strategic plan is
the main course of action created by top-level managers.
market
the mechanism by which buyers and sellers exchange goods and services. The production and pricing of goods and services is determined through the operation of a market
globalization of markets
the movement away from thinking of the market for your products as being local market or national and the entire world instead.
Globalization
the movement toward a more interconnected and interdependent world economy.
Product mix width refers to
the number of different product lines a company offers.
The span of control of a specific position is
the number of employees being supervised by a specific person.
Product line length is
the number of items in any given product line.
liability is
the obligation to pay a debt, such as an account payable or a loan.
Expansion or recovery
the phase when the economy begins to grow again and enters into an expansionary or recovery phase. Eventually, the recovery will hit a peak and the cycle begins again.
Real capital
the physical facilities used to produce goods and services
Situational influences include
the physical surroundings, the social surroundings, and the type of product purchased, and all of these can influence how a buyer behaves.
Monetary policy
the policy adopted by the monetary authority of a country that controls either the interest rate payable on very short-term borrowing or the money supply, often targeting inflation or the interest rate to ensure price stability and general trust in the currency.
vertical organization (or a tall organization),
the power belongs to a few, and most people are in positions in which they report to a supervisor. Decision making is centralized.
Socially responsible investing (SRI)
the practice of investing only in companies that have met a certain standard of CSR.
Controlling (also called monitoring) is
the process by which managers measure performance and make sure the company's plans and strategies are being or have been properly carried out.
Product differentiation is
the process of distinguishing a product from its competition in real or perceived terms to attract customers. It is critical for a product's success.
Planning is
the process of establishing goals and objectives and determining the best ways to accomplish them.
Customer relationship management (CRM) is
the process of establishing long-term relationships with individual customers to foster loyalty and repeat business. It combines customer service and marketing communications to retain customers in order to stimulate further sales of similar or supplementary products.
Market research is
the process of gathering and analyzing market information for making marketing decisions.
Sustainability
the process of improving the quality of people's lives in ways that simultaneously protect and enhance the earth's life support systems.
Leading is
the process of influencing, motivating, and enabling others to contribute to the success and effectiveness of an organization.
market segmentation,
the process of separating the broader market into smaller market
Organizing is
the process of structuring the capital, personnel, raw materials, and other resources to carry out a company's plans in a way that best matches the nature of the work.
environmental scanning
the process of surveying the marketing environment to assess external threats and opportunities.
Management is
the process of working with people and resources to accomplish the goals of an organization.
foreign direct investment
the purchasing of property and businesses in foreign nations
Exchange rates are
the rates at which currencies are converted into another country's currency. A strong dollar means that the U.S. dollar exchanges for a relatively large amount of foreign currency; a weak dollar does not.
What does the supply curve show?
the relationship between supply and price.
Form utility
when a company produces a product from raw materials, the product takes on a form that pleases the customer
Contract manufacturing occurs
when a firm subcontracts part or all of its goods to an outside firm as an alternative to owning and operating its own production facility.
Culture is
the set of learned attitudes, beliefs, and ways of life that are unique to a society and are handed down from generation to generation.
Legal regulations
the specific laws governing the products or processes of an industry.
organizational psychology
the study of how to create a workplace that fosters motivation and productivity among employees.
Ethics
the study of the general nature of morals and the specific moral principles that govern a person's behavior.
globalization of production
the trend of moving production to different locations around the globe to take advantage of lower costs or enhance quality.
Free trade
the unencumbered flow of goods and services across national borders.
A trade surplus occurs when
the value of a country's exports exceeds the value of its imports.
consumer behavior refers to
the ways individuals or organizations search for, evaluate, purchase, use, and dispose of goods and services.
mission statement
this defines the core purpose of the organization and describes the company's values, goals, and aspirations.
Convenience goods and services are
those products that customers purchase frequently, immediately, and effortlessly. Because they are normally consumed quickly, they are also referred to as nondurable goods.
How do Global companies do business with countries that have nonconvertible currencies
through the use of countertrade—a form of international barter, the swapping of goods and services for other goods and services.
The goal of an inverted organization is
to enable, encourage, and empower employees to do whatever they do best.
consumer price index (CPI)
tracks changes in prices over time by measuring changes in prices of goods in services that consumers purchase. lagging indicator, so it shifts after the economy changes.
producer price index (PPI)
tracks the average change in prices at the wholesale level.It tracks the prices of goods sellers use to create products, such as raw materials, product components that require further processing, and finished goods sold to retailers.
chief executive officer (CEO) is
typically responsible for the entire operations of the corporation and reports directly to the board of directors.
The infant industry argument states
undeveloped domestic industry needs time to grow and develop to compete in the global economy.
bootstrap financing
using their own money, borrowing funds from family or friends, trading services with customers.Other means of bootstrap financing include using trade credit, factoring, and leasing.
What are local business?
usually one of a kind and relies on local consumers to generate business.
Why do Natural monopolies exist?
utility companies that sell natural gas or water are examples and permitted in the United States to conserve natural resources but the government regulates the prices, preventing the companies from overcharging.
To evaluate the threats and opportunities facing a company, what resources do managers have to analyze?
various external elements.
Angel investors are
wealthy individuals who are willing to put up their own money in hopes of a profit return later on.
What are Social networking sites?
websites that make it easier for people to connect with one another online for the purposes of building and supporting social relationships.
Wikis are
websites that support editing by multiple authors, so team members can work on one common document all at the same time, watching one another make editing changes and having a live chat window open at the same time.
Price fixing
when a group of companies agree among themselves to set a product's price artificially high so customers have to pay more than they should for the product.
monopoly
when a provider of a good or service has control of all or nearly all of its market. [PG&E]
Ownership utility
when a store transfers ownership to the customer
Task utility
when someone performs a service for someone else
Place utility
when the product is made available for purchase at a place that is convenient for buyers
trade deficit exists
when the value of a country's imports exceeds the value of its exports.
Monopolistic competition
when there are many buyers and sellers and the products are similar but not identical. Often there is a perceived difference among consumers so the products are not perfectly substitutable products.
Perfect competition
when there are many buyers and sellers of products that are virtually identical and any seller can easily enter and exit the market. No single supplier can influence the price.
Competition
when two or more businesses vie to attract customers and gain an advantage.
offshore outsourcing (or offshoring)
which involves moving production from a domestic site to a foreign location.