Introduction to Business Exam 3 study guide

Purpose for industrial unions-why were they formed?

persistence of poor working conditions lead more workers to demand improvements.

Landrum-Griffin

1959 The Labor-Management Reporting and Disclosure Act (LMRDA) — also known as the Landrum-Griffin Act — deals with the relationship between a union and its members. The LMRDA grants certain rights to union members and protects their interests by promoting democratic procedures within labor organizations.

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A

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A

Cost-based pricing

A pricing method in which a fixed sum or a percentage of the total cost is added (as income or profit) to the cost of the product to arrive at its selling price.

head-on-competition

A type of business competition in which businesses compete directly, perhaps because they produce the same product or target the same demographics.

Three of the largest unions in the US

AFL-CIO, National Education Association (NEA), Service Employees International Union (SEIU)

Four components of the promotion mix.

Advertising, Personal Selling, Public Relations, Sales Promotion

AFL-CIO

American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) is a federation of 60 national and international labor unions that represents over 13 million working women and men. The main purpose of the AFL-CIO is to bring fairness and dignity to the workplace and secure social and economic equity.

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B

How is buying behavior described?

Buying Behavior is the decision processes and acts of people involved in buying and using products. Need to understand: why consumers make the purchases that they make?

improve the firm's public relations

Common goal of PR is to gain media publicity through press releases, press conferences, and event sponsorships.

public relations

Communication activities used to create and maintain favorable relationships between a company and the public.

Increasing Market Share

Companies increase market share through innovation, strengthening customer relationships, smart hiring practices, and acquiring competitors. A company's market share is the percentage it controls of the total market for its products and services. ... Higher market share puts companies at a competitive advantage.

developing a promotional campaign

Company's promotional objective, nature of the target market, characteristics of the product, organization's resources.

Variable cost

Cost of producing or purchasing product. (Increases as the volume of production increases).

What is marketing's overall purpose?

Creating relationships with customers by offering goods, services, and experiences that they value.

Types of retail stores

Department Stores, supermarkets, convenience stores, category killers, warehouse clubs, discount stores, specialty stores.

Steps in developing an advertising campaign

Establish Your Marketing Plan. ... Create a Plan of Action. ... Decide On Your Advertising Budget. ... Hunt Down Affordable Advertising Options. ... Know Your Target Audience. ... Advertise With Appropriate Mediums. ... Don't Be Afraid to Hire Freelancers. ... A Consistent Message is Key.

First step in developing advertising

Find your target market. Determine media used in budget. Develop it.

Promotion

Focuses on providing information to target markets.

What is promotion and what does it do?

Focuses on providing information to target markets.

Company product lines

Group of similar products that are related to each other in the way they work or the audience they target. They are effective product management, provide clarity for consumers, and simplify branding decisions.

reasons for dividing consumer product lines

Grouping by product lines provides more effective product management, clarity for consumers, and simplified branding.

Stages of new product line development

IPPC: Idea generation (generate as many ideas as possible), Product analysis (screen ideas to select the best one), Product development and testing (Build prototypes or small production runs of the product to test on a small scale), Commercialization (Utilize the knowledge acquired from previous phases and make final improvements to the product, and launch it to the market).

Different Phases in the direction of business effort and the evolution of the marketing concept.

Increased competition has made companies actively seek to determine and satisfy customer needs, with the goal of building long-term customer relationships

Implementation of the marketing concept

Increased competition has made companies actively seek to determine and satisfy customer needs, with the goal of building long-term customer relationships

How are the three unions differentiated and how did they come to be?

Industrial revolution was associated with working conditions that were crowded, unpleasant, unsafe, and lethal. This led to the rise of unions-organizations of workers acting together to negotiate their wages and working conditions

What is innovation and why should companies introduce new products?

Innovation is any product improvement that customers value over existing choices. The pace of innovation is accelerating, and companies that innovate can better serve customers and increase profits. Product innovations often improve our quality of life by providing improved function and quality, lower prices, and new experiences.

Product

Involves decisions about the product's design, brand name, packaging, and warranties.

Price

Involves setting prices that achieve particular goals.

Placement

Involves transportation, storage, and selection of wholesale and retail intermediaries.

How are retail stores differentiated?

Number of product categories, pricing, distribution intensity, and size.

Breakeven Point

Number of units that must be sold for total revenue to equal total costs. Calculated by dividing the contribution margin into total fixed costs.

What are the benefits of advertising?

Offers scale, targeting, choices, and accessibility.

Fixed Costs

Operating costs of a company. (Rent, salaries, and marketing expenses).

What is advertising?

Paid message communicated to a select audience through a mass media.

Personal Selling

Personal communication aimed at informing and persuading customers to buy a company's products. Adv. one on one so it's more effective than advertising, contorlled. Disadv. very expensive.

product positioning

Product positioning is the process marketers use to determine how to best communicate their products' attributes to their target customers based on customer needs, competitive pressures, available communication channels and carefully crafted key messages.

The four P's of the marketing mix

Product, Price, Placement, Promotion

Contribution Margin

Profit margin on a unit of sale. Calculated as sales revenue minus variable costs.

Service Employees International Union (SEIU)

SEIU is focused on organizing workers in three sectors: health care (over half of members work in the health care field), including hospital, home care and nursing home workers; public services (local and state government employees); and property services (including janitors, security officers and food service workers).

Decline

Sales and profit decline as consumer needs to move away from product category.

Growth

Sales and profits increase, and competitors decide to enter the product category.

Maturity

Sales peak and profit declines as the market becomes saturated and price competition increases.

What does it mean to strike?

a refusal to work organized by a body of employees as a form of protest, typically in an attempt to gain a concession or concessions from their employer.

National Education Association (NEA)

The National Education Association (NEA) is the largest professional interest group in the United States. It represents public school teachers and other support personnel, faculty and staffers at colleges and universities, retired educators, and college students preparing to become teachers.

Introduction

There are a few competitors and sales and profits are low.

Issues with most union-managment contracts

To begin with, labor and management don't always have the same goals. Labor would like to secure for its members the highest-paying, most secure jobs possible. Management would like to have a quality workforce but needs to control costs and retain flexibility in order to remain competitive in the marketplace. Based on these divergent goals, it becomes obvious why the initial proposals from each side might be miles apart. In addition, tensions can build between labor and management over time, which can interfere with negotiations. Sometimes these tensions carry over from the negotiations that took place on the previous contract, even though that may have taken place years earlier.

Sales Promotion

Use of incentives to encourage purchase of a product. Adv. people come to store, coupons. Disadv. people abuse coupon system.

What does it mean to have a closed shop?

a place of work where membership in a union is a condition for being hired and for continued employment.

Demand-based pricing

any pricing method that uses consumer demand-based on perceived value as the central element.

physical distribution

movement of the product.

Advertising

paid message communicated to a select audience through a mass media. Adv. offers scale, targeting, choices, and accessibility. Disadv. expensive

Stages of product life cycle

series of stages in which a product's sales revenue and profit increase, reach a peak and then decline.

Total Cost

sum of fixed and variable costs for a particular quantity of production.