MGT 4113-Irwin-Exam 2

(Accounting) *Managerial*

*used* by MANAGERS for *planning & control* (cost-volume-profit analysis)

(Accounting) *Tax*

*used* for *calculating & reporting* TAXES

(SUCCESS Model) *Stories*

-*involve* THEM -*with* REAL PEOPLE

TYPES of INVESTORS *most interested* in VARIOUS PARTS of a BUSINESS PLAN (4)

1. Family & Friends 2. Silent Partners/Angel Investors 3. Joint Venture Partners 4. Bankers

*Types* of MARKETING SEGMENTATION (2)

1. GEOGRAPHIC 2. DEMOGRAPHIC

(Strategies for Pricing) *Price Lining*

*different* PRICES for *different* QUALITIES (good, better, best)

Overdraft

*negative* BALANCE in a Depositor's BANK ACCOUNT

(SUCCESS Model) *Simple*

-SHORT & DEEP -*use* of ANALOGIES

(Strategic Marketing) *Types* of DIRECT MAIL (6)

1. Postcards 2. Catalogs 3. Videos 4. Brochures 5. Leaflets 6. CD-ROMs

(Product Life Cycle) *Maturity* (5)

1. SALES & PROFITS *level-off* 2. COMPETITION *becomes* FIERCE 3. PRICE WARS *common* 4. *suggest* NEW USES 5. *can be here* for a LONG WHILE

*Types* of *Questions* in a MARKET RESEARCH

1. SCALAR 2. DICHOTOMOUS 3. CATEGORICAL 4. OPEN-ENDED

(Key Components of a Business Plan) *Vision Statement*

5-10 *word* SENTENCE or TAGLINE

(Questions in Market Research) *Scalar* (Definition & Example)

*answered* by some sort of SCALE (ie. SCALE of *1-10*)

(Contents of a Press Release) *Attention*

*catchy* HEADLINE

(Contents of a Press Release) *Action*

*contact* INFORMATION

(Contents of a Press Release) *Desire*

*details* of OPENING INFORMATION

(Types of Marketing) *Referrals & Word-of-Mouth*

*offer* INCENTIVES for REFERRALS

(Contents of a Press Release) *Interest*

*pique* their INTEREST

(Strategic Marketing) *Direct Response Advertising* (Definition & 2 Examples)

*placing* an AD *on* a MEDIA SOURCE, *think* you will *order* RIGHT AWAY (ie. QVC, Infomercials)

(Types of Cash Flows) *Commercial Paper/Short-Term Debt*

*short-term* FINANCING *from* ANOTHER COMPANY

(Strategic Marketing) *Multichannel*

*use* of SEVERAL *different* CHANNELS to *reach* your CUSTOMERS

(Accounting) *Financial*

*used* by BANKS & OUTSIDE INVESTORS

(Customer Development Model) *Customer Building*

-*(re)build* your Company's ORGANIZATION & MANAGEMENT -*re-examine* your MISSION

(Customer Development Model) *Customer Creation* (2)

-*creation* comes *after* PROOF OF SALES -*develop* a NICHE that *suits* your PRODUCT

*Lengths* of a BUSINESS PLAN for a *NEW BUSINESS*

-*detailed* EXPLANATION -LONG

(Customer Development Model) *Customer Validation* (2)

-*develop* a *repeatable* SALES PROCESS -*only* EARLYVANGELISTS (innovators/techies) are *crazy* enough to BUY

Prototypes

-*first* VERSIONS of a PRODUCT in the PRODUCT DEVELOPMENT PHASE -*used* for *further* CUSTOMER *testing*

(Strategies for Pricing) *Premium Pricing* (2)

-*high* PRICE signals *high* QUALITY -ITEM may be a STATUS SYMBOL

(Strategies for Pricing) *Skimming* (2)

-*highest* PRICE the MARKET will *bear* -PRODUCT must be INNOVATIVE & SOMETHING *really* WANTED

(Strategies for Pricing) *Captive Pricing* (2)

-*inexpensive* BASE SYSTEM -*expensive* REPLACEMENT SUPPLIES

(SUCCESS Model) *Credible*

-*inside* QUESTIONS, *not outside* EXPERTS -*relying* on AUTHORITIES or TESTABLE AUDIENCES

(SUCCESS Model) *Emotional*

-*move* THEM -*tapping* NEGATIVE/POSITIVE FEELINGS

(Types of Marketing) *Personal Selling* (Definition & Components)

-*process* of *selling* your PRODUCTS/SERVICES -*includes*: 1. PROSPECT & EVALUATE 2. PREPARE 3. PRESENT 4. CLOSE & FOLLOW-UP

(Customer Development Model) *Customer Discovery* (2)

-*stop* SELLING, *start* LISTENING -*test* your HYPOTHESES: PROBLEM & PRODUCT *concept* (pain point & solution)

(SUCCESS Model) *Unexpected*

-*uncommon* SENSE -*producing* a SHORT CIRCUIT *b/n* 2 METAL FRAMES

(Key Components of a Business Plan) *Executive Summary*

-1-2 PAGE *overview* -*includes*: PRODUCT MARKET COMPETITIVE *advantages* MANAGEMENT BUSINESSES FINANCES

(Types of Marketing Segmentation) *Demographic* (Definition & 5 Subcategories)

-LIFECYCLE *position*- 1. INCOME 2. ETHNICITY 3. SEX 4. EDUCATION LEVEL 5. MARITAL STATUS

(Strategic Marketing) *Location* of DIRECT SALES (2 Sets)

-Local Fair, Cultural Event, Flea Market, Craft Fair -Vending Machines

(Key Components of a Business Plan) *Mission Statement* (2)

-PARAGRAPHS that *describes* the Firm's GOALS & COMPETITIVE ADVANTAGES -*talks* in TERMS of *how* it will *make* a DIFFERENCE for the CUSTOMER/INDUSTRY

(Strategies for Pricing) *Odd-Even Pricing* (2)

-PRICE *ends* w/ 9, 7, or 5 -PSYCHOLOGICAL HURDLE of *multiples* of 10

(SUCCESS Model) *Concrete*

-SENSORY *impressions* -*using* SPECIFIC LANGUAGE & DETAILS

*Lengths* of a BUSINESS PLAN for an *ESTABLISHED BUSINESS*

-SHORTER -*already have* INFORMATION

(Cash-to-Cash Cycle) pushcard vendor: ____ construction project:___

-few hours -few years

(Data in Marketing Research) *Survey* (3 Types w/ Description)

1. *IN-PERSON*: *most* EXPENSIVE, RICHEST 2. *MAIL*: *less* EXPENSIVE, *low* RETURN RATE 3. INTERNET

SMALL BUSINESS can *increase* CASH FLOW (6)

1. *attention & understanding* BUSINESS OPERATIONS 2. *taking* DEPOSITS & PROGRESS PAYMENTS 3. *offer* DISCOUNTS for PROMPT PAYMENTS 4. *asking* for your MONEY 5. *taking* on NONCORE PAYING PROJECTS 6. *factoring* RECEIVABLES

(Product Life Cycle) *Introduction* (4)

1. *build* BRAND AWARENESS 2. *speak* to RELATIVE ADVANTAGE 3. *heavy* MARKETING *slows* BREAKDOWN 4. often *low* COMPETITION

*SUCCEEDING in a LOW GROWTH INDUSTRY* from "CUSTOMER IS ALWAYS DEAD" (3)

1. *combine* the *best* ELEMENTS of SERVICE & MANUFACTURING 2. *anticipate* what WORLD *will be*, what's *changing*, what *will be needed* 3. all about *listenting*, being *willing to change*, having *systems to make change*

*Influences* for SETTING PRICE (4)

1. *demand* for PRODUCT/SERVICE 2. VALUE *delivered* to CUSTOMER 3. PRICES *set* by COMPETING FIRMS 4. your BUSINESS STRATEGY & PRODUCTION PLACEMENT

(New Product Development Process) *Concept* (5)

1. *end* USERS 2. CUSTOMERS 3. SALESPEOPLE 4. MARKET *research* 5. COMPETITORS

(Strategic Marketing) *Challenges* of DIRECT MARKETING (2)

1. *getting* ADDRESSES is a *big* HURDLE 2. must *overcome* a lot of CLUTTER

*How* to *SUCCEED in a DOWNTURN* from "BEAR OPPORTUNITIES" (4)

1. *leverage* your RELATIONSHIPS 2. *advertise* VALUE PROPOSITIONS 3. *control* COSTS 4. *pursue* TRADITIONAL MARKETERS

(Financial Statements) *Income Statement*

1. *primary* SOURCE of INFORMATION about a BUSINESS' PROFITABILITY 2. REVENUES-EXPENSES=NET INCOME (R-E=NI)

*Importance* of ACCOUNTING (5)

1. *proves* what your BUSINESS *did* FINANCIALLY 2. *shows* how much your BUSINESS is WORTH 3. BANKS, CREDITORS, DEVELOPMENT AGENCIES, & INVESTORS *require* it 4. *provides* EASY-TO-UNDERSTAND PLANS for BUSINESS OPERATIONS 5. you *can not know* how your BUSINESS is DOING *w/o* it

*Responsibilities* of FINANCIAL ACCOUNTING (5)

1. *reporting* to OUTSIDERS 2. RECORD *keeping* 3. TAXATION 4. *control* of RECEIVABLES 5. *analysis* of BUSINESS OPERATIONS

(Data in Marketing Research) *Focus Groups* (3)

1. *small* GROUP *led* by MODERATOR 2. *8-20* PEOPLE 3.PAY *for* their TIME

(Product Life Cycle) *Decline* (4)

1. *varies* in RATE 2. *caused* by NEW TECHNOLOGY 3. *caused* by SHIFT in PREFERENCES 4. SALES & PROFITS *fall*

(Product Life Cycle) *Growth* (4)

1. ACCEPTANCE *increases rapidly* 2. PROMOTION *less* CRITICAL 3. *maximize* MARKET SHARE 4. PRICES *drop* as PRODUCTION *improves*

(Parts Investors are Interested In) *Family & Friends* (4)

1. AMOUNTS & SCHEDULES for *return* 2. *stability* of FIRM 3. FUNDS *use* 4. *your* INVESTMENT

*Contents* of a PRESS RELEASE

1. ATTENTION 2. INTEREST 3. DESIRE 4. ACTION

*Commonly Used* ACCOUNTING PACKAGES (3)

1. BUSINESS ENTITY Concept 2. GOING CONCERN Concept 3. The ACCOUNTING EQUATION

*Types* of CASH FLOWS (6)

1. CASH 2. *cash* EQUIVALENTS 3. CURRENCY 4. *demand* DEPOSITS 5. *marketable* SECURITIES 6. *commercial* PAPER/*short-term* DEBT

(Parts Investors are Interested In) *Bankers* (3)

1. CASH FLOW & CASH CYCLE 2. ASSET/COLLATERAL *base* 3. *long-term* PROSPECTS

*Stages* in the NEW PRODUCT DEVELOPMENT PROCESS (4)

1. CONCEPT 2. *idea* EVALUATION 4. ALPHA/BETA *test* 5. LAUNCH

What *two steps* corroborate your BUSINESS PLAN?

1. Customer DISCOVERY 2. Customer VALIDATION

*CUSTOMER DEVELOPMENT MODEL* from "PATHS to EPIPHANY"

1. Customer DISCOVERY 2. Customer VALIDATION 3. Customer CREATION 4. Customer BUILDING

2 *Difficulties* in *Understanding* the INCOME STATEMENT

1. DISAGREEMENTS about WHAT exactly should be *reported* as REVENUE 2. DISPUTES over WHEN to *recognize* REVENUE

*Types* of *Data* used in MARKETING RESEARCH (3)

1. ETHNOGRAPHIC Research 2. FOCUS GROUPS 3. SURVEY

(Parts Investors are Interested In) *Joint Venture Partners* (5)

1. FIT *b/n* the FIRMS 2. COMPETITIVE *advantage* 3. BENEFITS 4. INTELLECTUAL PROPERTY *protection* 5. R&D

(Parts Investors are Interested In) *Silent Partners/Angel Investors* (4)

1. GROWTH *rate* 2. MARKET 3. BUSINESS TEAM 4. AMOUNTS & SCHEDULES for *return*

3 Common FINANCIAL STATEMENTS

1. INCOME STATEMENT 2. BALANCE SHEET 3. CASH FLOW STATEMENT

*Stages* of the PRODUCT LIFE CYCLE (4)

1. INTRODUCTION 2. GROWTH 3. MATURITY 4. DECLINE

*Qualities* of a GOOD TAGLINE (3)

1. Inspiring 2. Overarching 3. Long-Term

*How* to *choose* a LOCATION (3)

1. LAYOUT 2. CUSTOMER *contact* 3. *leasing* vs. *buying* vs. *building*

*Types* of ACCOUNTING (3)

1. MANAGERIAL 2. TAX 3. FINANCE

(New Product Development Process) *Launch* (3)

1. MARKETING *plan* 2. PRODUCTION 3. MARKET *introduction*

2 *Difficulties* SMALL BUSINESS *Experience* w/ CASH-TO-CASH CYCLES

1. MISMATCH in TIME *b/n receiving & spending* CASH 2. MISMATCH in TIME *b/n* the *size* of PAYMENTS *received* & *size* of PAYMENTS *to be made*

*Focus* of a MARKETING STRATEGY (3)

1. OVERALL STRATEGY your FIRM *pursues* in the MARKET 2. SALES PLAN 3. *longer-term* COMPETITIVE PLAN

*Strategies* for PRICING (6)

1. SKIMMING 2. PREMIUM pricing 3. ODD-EVEN pricing 4. PARTITIONED pricing 5. CAPTIVE pricing 6. price LINING

*Key Components* of a BUSINESS PLAN (3)

1. VISION *statement* 2. MISSION *statement* 3. EXECUTIVE *summary*

(Strategic Marketing) *Types* of DIRECT SALES (2)

1. WORD-OF-MOUTH (WOM) 2. SALESPERSON *contacts* BUSINESS likely to *buy* your PRODUCT/SERVICE & *meets* w/ THEM

MARKETING RESEARCH *Concept* (3)

1. can *verify* the SIZE of the POTENTIAL MARKET 2. *shows* what the COMPETITORS are *doing* CORRECTLY-& their WEAKNESSES 3. *reveal* WHERE potential CUSTOMERS are *likely* to SHOP

(Strategic Marketing) *Internet* (2 Facts)

1. very COST-*effective* & EFFICIENT 2. SMALL BUSINESSES *need to have* a WEBSITE, even if *not used* for SALES

(Strategic Marketing) *Telemarking*-What have many states adopted?

"DO NOT CALL" Lists

(Balance Sheet) What do you OWN?

*ASSETS*: -Cash -Inventory -Equipment -Accumulated Depreciation

(Strategic Marketing) *Guerilla Marketing* (Key & 3 Examples)

*KEY*: *catch* CONSUMER'S ATTENTION 1. *placing* FLYERS *under* WINDSHIELD WIPERS of CARS 2. *waving* SIGNS at *passing* CUSTOMERS 3. BUSINESS CARDS on BULLETIN BOARDS

(Balance Sheet) What do you OWE?

*LIABILITIES*: -Accounts Payable -Debt *OWNERS EQUITY*: -Owner's Contributions -Retained Earnings

*SUCCESS* Model from "LOUD and CLEAR"

*S*imple *U*nexpected *C*oncrete *C*redible *E*motional *S*tories

(Questions in Market Research) *Open-Ended*

*allows* RESPONDENTS to *express* THEMSELVES as they CHOOSE

(Questions in Market Research) *Categorical* (Definition & Example)

*answered* by *selecting* the PROPER CATEGORY (ie. What's your ethnicity?)

Indirect Distribution (5)

1. PRODUCER->DISTRIBUTOR->RETAILER->END USER 2. MIDDLEMEN 3. many *not interested* in *dealing* w/ NEW FIRMS-must *prove* it will SELL 4. TRADESHOWS *gain* SALES & RECOGNITION 5. E-TAILERS *more likely* to take a CHANCE

Direct Distribution (4)

1. PRODUCER->END USER 2. *simple* & *inexpensive* 3. *more* CONTROL over *where* PRODUCT/SERVICE *goes* 4. *many* FORMS

(New Product Development Process) *Idea Evaluation* (4)

1. PRODUCT *fit* 2. MARKET *trends* 3. CONCEPT *testing* 4. BUSINESS *analysis*

(New Product Development Process) *Alpha/Beta Test* (2)

1. PROTOTYPES 2. *test* MARKET

Receivables

AMOUNTS *owed* to BUSINESS *for* MERCHANDISE that was *sold* on credit

Payables

AMOUNTS *owed* to VENDORS *for* MERCHANDISE/SERVICE *purchased* on CREDIT

(Types of Cash Flows) *Cash Equivalents*

ASSETS that can be *quickly converted* to CASH

(Accounting Packages) The Accounting Equation

ASSETS=LIABILITIES+OWNERS EQUITY

(Strategies for Pricing) *Partitioned Pricing*

BASE PRICE *+* COST for ADDITIONAL COMPONENTS

(Types of Cash Flows) *Currency*

BILLS & COINS *printed* by GOVERNMENTS to *represent* MONEY

(Accounting Packages) *Business Entity Concept*

BUSINESS has an EXISTENCE *separate* from that of its OWNERS

(Accounting Packages) *Going Concern Concept*

BUSINESS is *expected* to *continue* in EXISTENCE for the FORESEEABLE FUTURE

(Financial Statements) *Cash Flow Statement*

CASH FLOWS from: *operating, investing, & financing* activities

(Strategic Marketing) *Inbound Telemarketing*

CUSTOMER *calls* MANUFACTURER or SERVICE PROVIDER

Availability Float

DELAY in *transferring* MONEY *due* to INTERNAL PROCEDURES

Float

DELAY in the *movement* of MONEY *among* DEPOSITORS & BANK

Processing Float

DELAYS in DELIVERY CHECKS

(Indirect Distribution) *Middlemen*

DISTRIBUTORS, WHOLESALERS *get* the PRODUCT to the END CUSTOMER, *providing*: -INVENTORY *control* -ADVERTISING -PROMOTION

*What* is the *most important* WRITTEN PART of the BUSINESS PLAN and *why* (3)?

EXECUTIVE SUMMARY 1. *most* WIDELY *distributed* 2. READERS typically *start* w/ EXECUTIVE SUMMARY 3. *limited* DETAILS, *complete* OVERVIEW

Demand Deposits

MONEY *held* in CHECKING & SAVINGS Accounts

(Types of Cash Flows) *Cash*

MONEY *immediately* AVAILABLE to SPEND

(Types of Cash Flows) *Demand Deposits*

MONEY in CHECKING & SAVINGS Accounts

(Types of Cash Flows) *Marketable Securities*

STOCKS & BONDS

Born International

NEW FIRM that *opens* on a WEBSITE *immediately*, thus being *exposed* to CUSTOMERS *around* the WORLD

Do SMALL BUSINESSES have PROBLEMS with INCOME STATEMENT *Difficulties*?

NO -SALES are CASH, or *same* as CASH

(Data in Marketing Research) *Ethnographic Research*

OBSERVATION

(Types of Marketing) *Publicity*

PR *is* FREE ADVERTISING

(Strategic Marketing) *What* is the *most* EXPENSIVE form of DIRECT MARKETING?

TELEMARKETING

Cash-to-Cash Cycle

TIME that is *required* for a BUSINESS to *acquire* RECOURCES->*convert* them into PRODUCTS->*sell* the PRODUCT->& *receive* CASH from SALES

(Financial Statements) *Balance Sheet* (Basic Concept & Definition)

What do you OWN?=What do you OWE? -*used* to *determine* the LIQUIDITY, FINANCIAL FLEXIBILITY, & FINANCIAL STRENGTH of the BUSINESS

Press Release

a WRITTEN ANNOUNCEMENT *intended* to *draw* NEWS MEDIA *attention* to a SPECIFIC EVENT

(Questions in Market Research) *Dichotomous*

have *only 2* possible CHOICES