Business Exam 2... Gulp

In the United States, a patent lasts for

20 Years

Place

A company's distribution strategy is what we refer to as _________ in the marketing mix because it is the _________ where the product will be purchased.

a group of similar products that differ only in relatively minor characteristics.

A company's product line

consists of all the products that company offers for sale.

A companys product mix

Some examples of marketing intermediaries are:

Wholesaler and Retailers

One component of management is human resources management, which involves

all aspects of managing the people employed by a company

Wholesaler

an intermediary who sells products to retailers.

Once a patent expires...

anyone can use the patented invention and make money from it

The advantages of general partnerships include more sources of

capital and ideas for the business as well as flexibility in determining how the company will be run, but the disadvantages include unlimited personal liability for the debts of the business (meaning each partner is 100% responsible for the debts of the business).

All of the P's should be consistent to form a

coherent marketing strategy

Once you use a new trademark, you have

common law ownership rights, but many people elect to further protect their mark by registering the trademark with the US Patent and Trademark Office

Double taxation refers to the fact that

corporations pay income tax on any profit generated by the company, and then any dividends distributed to the shareholders/owners are taxed as well.

Intellectual Property (IP) refers to

creations of the mind, or the ownership of ideas.

A company's Organizational Chart

delineates the company's chain of command

Oftentimes, companies will use price and other factors as a way to

differentiate their product or service from a competitors, so don't think of these strategies as mutually exclusive

There are two main distribution strategies

direct to consumer or using a marketing intermediary/middleman.

it is not required that a work subject to copyright be registered with any

governmental entity, but registration of a copyright is recommended because it serves as evidence of ownership.

Promotion

includes all activities intended to communicate information about the product to a company's target market. This includes advertising, personal selling, and public relations.

Retailers

intermediaries who sell products to consumers. Types of _________ include convenience stores, specialty stores, and many others that we did not discuss at length.

in a Limited Liability Company, because the entity is typically what is known as a pass-through entity (meaning that it does not pay tax and instead passes its tax liability on to the individual owners according to their ownership interest) many venture capitalists will not

invest in it

Trademark

is a design, symbol, or other mark that identifies and distinguishes products and/or services from others on the market. We generally think of these as applying to logos

Two-Tariff/Razor & Blades

is a method of pricing a company might use when selling a product that has a recurring replacement part. Typically, the idea is to sell the product for cheap (often taking a loss) while making a high profit margin on the replacement parts (think of razors and blades, printers and ink, etc.). Nintendo utilized this strategy for selling the NES, but managed to sell both the console and the games at a profit, which was unique and very lucrative.

Cost Plus Pricing

is a method of pricing a product based on a standard mark-up over the cost of manufacturing the product.

Copyright

is a protection of original creative works

A brand is a

name, term, symbol, or design that identifies the product and distinguishes it from other products on the market. Customers have varying relationships with these

In any supply chain, every participant must be compensated, so if using marketing intermediaries to sell a product, the company who manufactures the product will

not be receiving the purchase price paid by the consumer because some of that money will go to the marketing intermediaries.

In order to qualify for a patent the invention has to be

novel, non-obvious, and useful

Companies can elect to compete utilizing a price or non-price strategy. An example of a non-price competition strategy would be

offering superior service to a similarly priced product.

In all cases of IP ownership it is the responsibility of the

owner to enforce their IP rights.

Trade Secrets are often used in lieu of a

patent because they do not expire. Examples include the recipe for Coca-Cola and Kentucky Fried Chicken.

Brand preference is

preferring one brand over other brands

When determining where to locate a production facility, companies should take into account a number of factors including:

proximity to raw materials, proximity to markets, access to labor, governmental factors such as taxes and regulations, access to transportation, and waste disposal issues.

The advantages of a corporation are this legal separation, which

reduces the risk of owning a company, and the ability to raise capital from venture capital funds.

departmentaization

refers to how an organizational chart is structured. Company's could elect to be organized by function, geographical region, product, etc.

It is important that the conversion process adds

value to the inputs in such a way that the company can sell the product for more money than it spent producing it (otherwise, the company would not make a profit).

A production process is

where inputs go through a conversion process and the output of that process is a product.

Products can be classified based on

who they are being sold to (consumer product vs. business/enterprise product). . They can be further classified into categories such as convenience products, shopping products, specialty/luxury products.

There are three main types of Barriers to International Trade:

Cultural, Economic, and Political.

Mass production is possible via three innovations of the industrial revolution:

Mechanization, Standardization, and Specialization.

There are many types of IP protections some are

Patent, Trademark, Copyright, Trade Secret

Price-There are several ways a company can choose to price its product. The following pricing strategies are common:

Penetration Pricing, Price Matching, Cost Plus Pricing, Two-Tariff/Razor & Blades

A company's _____________includes all the features (tangible and intangible) that the company sells to its customers.

Product

Every product will go through the

Product Lifecycle

4 P's of the Marketing Mix

Product, Price, Place, Promotion

Every product is created via a

Production Process

Brand insistence is

Pure loyalty to the brand to the point that a customer would never use a competitor's product

What is is similar to a corporation in that the new entity has the ability to do the same things a person can generally, however, this entity is more flexible (similar to a general partnership in that regard) and is not subject to double taxation.

Limited Liability Company

There are 3 main ways a company can do the marketing strategies of lengthening the amount of time that the product is in the growth and maturity stages.:

1) increase the frequency of use, 2) find new users, and 3) find new uses for the product.

All of the Ps should be consistent to form a coherent marketing strategy. For example, it wouldn't make sense for a company to sell a luxury product via price matching at a convenience store being promoted via a coupon insert in the newspaper. It would make much more sense for that product to be sold using prestige pricing at a specialty store being promoted via an advertisement in a luxury goods magazine like Robb Report.

<<Just to learn

Sole Proprietorship

A business owned by one person. In a sole proprietorship there is no legal separation between the business and the individual owner of the business.

Corporation

A business owned by stockholders who share in its profits but are not personally responsible for its debts...is formed by registering with the state and creating a new legal entity. This entity takes on the rights and responsibilities of a person meaning it is capable of owning property and entering into contracts and is required to pay its own debts and pay taxes. Because it is a separate legal entity, there is a separation between the business and the owner(s) of the business, which means that the debts of the business can no longer be satisfied via collection of the personal assets of the owner(s).

One component of a product is the product's

Brand

Most successful businesses own some form of

Intellectual Property

Product Life Cycle has 4 stages which are

Introduction, growth, maturity, and decline

Mechanization

Is the use of machines

If the evaluation of the performance of the selected solution indicates it did not work, then you would

Repeat the process

There are 4 main forms of business organization we discussed in class. They are

Sole Proprietorship, General Partnership, Corporation, and Limited Liability Company

Patent

is a type of IP protection that allows for the owner of an invention to have the exclusive right to make, use, or sell that invention.

Specialization

is assigning laborers specific and unique tasks rather than having each worker participate in the entire production process from start to finish.

Limited Liability Company

is formed by registering with the state and creating a new legal entity.

General Partnership

is formed when two or more people agree to share the profits and losses of a business. The partners make an agreement as to their rights and responsibilities with respect to the business.

trade secret

is information that is commercially valuable if kept secret, is known to a small number of people, and the owner of the information has taken reasonable steps to ensure the information remains secret.

Price Matching

is pricing a product at the exact same price as a competitor. This is typically done in conjunction with other tactics like providing superior service in order to differentiate from a competitor's offerings on things other than price.

prestige pricing

is setting a high price in order to convey quality and exclusivity. This is what you would use for a luxury product.

Standardization

is the use of standard, uniform, and interchangeable parts.

The disadvantages of a corporation..

it is expensive to hire the lawyers and accountants necessary to make sure the corporation is operating properly and double taxation.

The goal of any marketing strategy is to

lengthen the amount of time that the product is in the growth and maturity stages.

There is still a liability shield for Limited Liability Company so it is

less risky than sole proprietorships and general partnerships.

Because it is a separate legal entity, there is a separation between the business and the owner(s) of the business, which means that the debts of the business can no longer be satisfied via collection of the personal assets of the owner(s). In class we referred to this as a

liability shield or a corporate veil.

Typically when IP is used by others it is via a

licensing agreement wherein the IP owner is paid a royalty based on a percentage of sales or profits generated from the use of the IP

Sole Proprietorships and General Partnerships are not

separate legal entities, so the assets of the owners of the business are subject to collection to satisfy the debts of the business. This is very risky for the owners.

Penetration Pricing is

setting an intentionally low price in order to gain market share. This is often used when there are dominant and entrenched products in a market and the company needs to induce buyers to try their product. The price will eventually go up once buyers develop a preference for that product.

Brand awareness is

simply knowing that a brand exists.

In order to form a sole proprietorship a business owner simply needs to

start operating and not have any co-owners.

In a sole proprietorship there is no legal separation between the business and the individual owner of the business, which means...

that the owner's personal assets are at risk to satisfy the debts of the business.

The three main functions of human resources managers are to

to acquire, maintain, and develop talent to work in the company