DECA BFS Performance Indicators

Describe the relationship between economic conditions and financial markets

"Economic conditions affect the financial markets in every way. Interest rates, economic growth, inflation/deflation, and confidence all affect the financial markets. Interest rates whether low or high have an impact on the financial markets. High interest rates reduce companies profitability while low interest rates increases financial output. Economic growth. Higher economic growth helps firms and businesses be more profitable because there will be more demand for goods and services from the consumers. Inflation and deflation affects the market because it represents the value of money. If the value of money goes down more people are less willing to borrow money, therefore there is less money circulating around the markets. Lastly, confidence affects the financial markets because it defines investor motivation. If investors are expecting a big earnings announcement from a public business, and the business fails to meet these expectations, then the investors will lose confidence, and pull out their money from that company."

Discuss the financial planning process

(1) determining your current financial situation (2) developing financial goals (3) identifying alternative courses of action (4) evaluating alternatives (5) creating and implementing a financial action plan, and (6) reevaluating and revising the plan.

Discuss the nature of enterprise risk management

(ERM) is a plan-based business strategy that aims to identify, assess, and prepare for any dangers, hazards, and other potentials for disaster—both physical and figurative—that may interfere with an organization's operations and objectives.

Use consensus-building skills (SP)

(also called collaborative problem solving or collaboration) is essentially mediation of a conflict which involves many parties. Usually, the conflict also involves multiple, complex issues.

Explain types of financial markets

- Capital Markets (Stock and Bonds) - Money Markets(Cash, CDs) - Futures Markets(investing in a future price but paying the price today) - Commodity Markets (trading commodities) -Derivatives Markets(complex investments based on other investments) - Insurance Markets(buy and sell insurance) - Forex Markets(exchanging currencies.)

Describe sources of income (wages/salaries, interest, rent, dividends, transfer payments, etc.)

- wages/salaries: compensation for work (in proportion to work done/on regular basis) - interest: fee charged by lender to borrower for use of borrowed money - rent: payment for use of space or property - dividends: taxable payment paid out to shareholders out of company's current/retained earnings - transfer payments: money paid by government to citizens (social security, unemployment, welfare, disability)

Describe the role of financial institutions

-conducts transactions: loans, deposits, investments. Investment Banks Face Amount Certificates Investment Companies Commercial Banks Loans/Credit Unions Insurance Companies Management Investment Companies Brokerages -Purpose : Interact with consumers to help them achieve financial goals

Describe data mining tools and techniques.

-constituted of research of various resources, such as govt reports and databases, to deduce new logical info -after taking a large data set, Association/Relation: make simple correlation between two or more items often of same type to identify patterns

Discuss the nature of data mining

-data mining: process of examining large databases to gather new info -computational process of discovering patterns in large data sets ("bigdata") involving methods at the intersection of artificial intelligence, machine learning, statistics, and database systems

Explain the need to save and invest

-helps create wealth needed to achieve financial goals - protect business from emergency -reduce need for debt - provide long-term stability

Demonstrate active listening skills.

1. Face the speaker. Sit up straight or lean forward slightly to show your attentiveness through body language. 2. Maintain eye contact. 3. Minimize external distractions. 4. Respond appropriately to show that you understand. Murmur ("uh-huh" and "um-hmm") and nod. Raise your eyebrows. Say words such as "Really," "Interesting," as well as more direct prompts: "What did you do then?" and "What did she say?" 5. Focus solely on what the speaker is saying. 6. Minimize internal distractions. 7. Keep an open mind. 8. Avoid letting the speaker know how you handled a similar situation.

Explain the nature of risk management

Methods of Risk Management: Avoidance - halting activities that cause risk Acceptance - taking no measures to mitigate risk Transference - placing risk on another entity Reduction - mitigating (but not eliminating) risk

Explain the nature of capital investment

A capital investment is defined as a sum of cash acquired by a company to pursue its objectives, such as continuing or growing operations. It also can refer to a company's acquisition of permanent fixed assets such as property, plant and equipment (PP&E).

Describe types of financial-services providers.

A commercial bank is an institution that offers a full range of financial services, such as checking, savings, and lending. A savings and loan association is a service provider that may specialize in savings accounts and mortgage loans, but now offers a wide range of services. Mutual savings banks specialize in savings accounts and mortgages. Credit unions are nonprofit institutions that are owned by its members. Traditionally, the members of a credit union have a common bond such as employment with the same company. Credit unions offer a full range of financial services. Non-deposit financial institutions include life insurance, investment, finance, and mortgage companies. Such companies specialize in their respective industry but may offer other financial services as well. Finance companies offer higher interest rates loans to individuals and businesses that cannot borrow elsewhere, often due to credit problems.

Explain the responsibilities of finance professionals in providing client services

A financial professional, who works with clients to create budgets, retirement plans, investing strategy, must first have exceptional knowledge of the industry to respond to client needs. Additionally, communication skills are paramount as clients are discussing sensitive financial matters including marriage and planning for death. The ability to listen to clients and show empathy while being responsive to a client's needs will build trust and establish a long term relationship.

Compare mergers and acquisitions

A merger occurs when two separate entities combine forces to create a new, joint organization. Meanwhile, an acquisition refers to the takeover of one entity by another. Mergers and acquisitions may be completed to expand a company's reach or gain market share in an attempt to create shareholder value.

Explain the nature and scope of purchasing

A person who purchases goods for business purposes is called an organizational buyer. The types of purchasing situations include: new task purchase, in which a purchase is made for the first time; modified rebuy, where the buyer has had experience buying the good or service but some aspect of the purchase has changed; and straight rebuy, when a buyer routinely orders the goods or services from the same vendor(s) as in the past. Suppliers should be selected using the following criteria: production capabilities, past experiences, special buying arrangements, and special services. Purchasing also involves the skill of negotiation. Items to be negotiated include prices, dating terms, delivery arrangements, and discounts.

Describe the nature of income statements.

A statement that shows how much a business has made in a certain accounting period Shows the net profit or net loss incurred during a time period

Discuss the nature of stock options

A stock option is the right to buy a specific number of shares of company stock at a pre-set price, known as the "exercise" or "strike price," for a fixed period of time, usually following a predetermined waiting period, called the "vesting period."

Explain communication techniques that support and encourage a speaker.

Active listening, taking notes, and nonverbal cues such as eye contact.

Explain the role of information systems

An information system is a set of procedures and methods that generate, store, analyze, and distribute information for use in making business decisions. Such systems organize, collect, and store data for current use or future decisions. Most information systems rely on data about current customers, sales reports, and inventory levels. Businesses use this information to make decisions about advertising, product planning, and pricing. Information can be secured through the use of primary data, including company records or government data, or secondary data, such as customer surveys.

Explain types of investments.

Bonds: by purchasing a bond, you are lending money to a company or business—in return the company or government will eventually pay you back Stocks: by purchasing stock, you are essentially buying a piece of the company, so you can vote as a shareholder and say what the company can or cannot do Mutual funds: a collection of stocks and bonds that is held by a group of people. By investing in a mutual fund you are sharing in your part of the risk and your part of the reward Others: precious metalks, antiques, real estate, bitcoin

Describe the nature of budgets

Budgets include monetary sums set aside for various activities such as purchase, savings, and investments.

Explain the concept of private enterprise

Business activities that are not controlled by the state E.g. Bob decides to open up a car garage, the state does not own his garage

Employ communication styles appropriate to target audience

Communication channels used for business communication include websites, letters, email, phone conversations, videoconferences and face-to-face meetings. Effective communication relies on selecting an appropriate communication channel for your message. Factors to consider when selecting a communication medium include the need for feedback, the customer or target market, and the purpose of your message. You must identify the people you want to communicate with, research how they obtain information, consider the complexity of the message you want to communicate, and calculate the cost of communicating and decide whether you want the communication to be interactive.

Explain the nature of business ethics

Business ethics is important to making the general public happy about what happens in the business world (public relations). Business Ethics: creates a good reputation balances the needs of the stakeholders with the needs of the company helps the business thrive in the global economy helps to retain employees keeps the business from being penalized under the law

Develop rapport with customers

By exhibiting empathy with customers and being understanding, employees can build rapport with and retain customers.

Describe the nature of short-term financial management

Companies develop short-term financial plans to meet budget and investment goals within one fiscal year. These plans have a higher degree of certainty compared to long-term plans. Short-term plans often are amended as financial and investment goals change. Businesses and individuals alike use short-term plans to manage short-term cash deficits.

Explain the role of capital markets in business finance

Capital markets seek to improve transactional efficiencies. These markets bring those who hold capital and those seeking capital together and provide a place where entities can exchange securities.

Describe the nature of cash flows

Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business. At the most fundamental level, a company's ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow (FCF)

Discuss the nature of convergence/consolidation in the finance industry

Convergence or consolidation in the finance industry is the practice of businesses, such as banks and insurance companies joining forces with each other in order to offer customers a broad range of financial services. In one way, banks can create an insurance subsidiary or sister company to produce insurance products. In another, a bank can offer insurance products through a joint venture with an insurance company. Companies would do this to improve profitability by increasing their fee income and expanding their product/service mix. It also helps to reduce the cost of locating and securing new customers.

Explain forms of financial exchange (cash, credit, debit, electronic funds transfer, etc.)

Credit enables a business or individual to purchase goods and services in exchange for a promise to pay later. It is most helpful when consumers want to make major purchases, though it is often used for more common, less expensive items. Customers are typically issued a credit card from a bank to make such purchases. Debit is a variation of credit. Consumers using a debit card authorize a seller to withdraw funds directly from the consumer's bank account at the time of sale. A cash sale is any transaction in which the customer pays for the item with cash or a check. Other forms of retail sales transactions include layaway, on-approval, and cash-on- delivery (COD). Layaway means removing merchandise from stock and keeping it in a separate storage area until the customer pays. In an on-approval sale, an agreement is made permitting a customer to take merchandise home for further consideration before paying. A COD sale is a transaction that occurs when a customer pays for goods at the time they are delivered.

Explain the nature of positive customer relations

Customer relations involve finding customers and keeping them satisfied. It provides companies with the means to develop and nurture customer relationships, including lead generation, sales support, customer service, and other after-sales activities that generate a positive overall image of the company.

Explain how digital communications (e.g., email, text messages, chats) exposes business to risk

Digital communication is not as safe since it has a tendency of being hacked. If your digital communication is not safe and encrypted, then someone could be able to hack into your messaging server and see all of your confidential business information that has been sent over digital communication.

Explain the nature of effective communications

Effective communications can efficiently persuade or inform a group or individual through methods such as simplicity and action.

Discuss the relationship between risk management and business finance

FRM does this by using financial instruments to manage risk. This includes measuring credit, market risk, inflation risk, interest rate risk, liquidity, volatility, etc.

Explain the role of finance in business.

Finance is the function of business that pertains to money management. A financial plan is an important element of an overall business plan. Elements that pertain to the role of finance in a business include start up/equity financing, debt financing, and growth financing. Various financial statements, such as a balance sheet and income statement, provide a way to analyze a company's overall financial standing. Managing your business' finances will include planning for profits by forecasting sales, evaluating profit potential, controlling costs, and budgeting. Business financing also requires managing taxes and credit.

Explain the nature and scope of financial globalization

Financial globalization is the worldwide development of economic, financial, trade and communication integration. This pushes business executives to consider broad views in the global marketplace as countries, and their economies, become interconnected and interdependent.

Describe the need for financial information.

Financial information includes raw data, records, and reports. Consumers are essentially buying information when dealing with financial services providers; businesses rely on accurate financial information to make sound decisions. Financial services products are bought and sold based on information about costs, returns, and risks. Financial information is used to match company resources to its planned activities and to identify additional resources that may be needed or secured. Businesses use information to identify ways to reduce expenses and invest company assets. Also, information is used to forecast for future budgeting and growth, as well as to control and manage risk. Other pieces of information that are required include sales, inventory, operating systems, personnel costs, insurance expenses, tax liability, and profitability. In addition, information must be collected regarding external factors such as economic conditions, investment alternatives, and competition.

Describe types of financial risks (e.g., interest rate risk, equity risk, commodity risk, etc.)

Financial risks that you should consider include the risks of inflation, rising or falling interest rates, loss of income, and liquidity. Liquidity is the ability to convert assets into cash without loss of value.

Discuss the analysis of a company's financial situation using its financial statements

Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes. External stakeholders use it to understand the overall health of an organization as well as to evaluate financial performance and business value.

Explain how value is created for a company

From a financial perspective, value is said to be created when a business earns revenue (or a return on capital) that exceeds expenses (or the cost of capital). But some analysts insist on a broader definition of "value creation" that can be considered separate from traditional financial measures.

Describe factors that affect the business environment

Geographical and Ecological or Natural Factors. Demographic Factors. Economic Factors. Political and Legal Factors. Social and Cultural Factors. Physical and Technological Factors.

Explain the purposes and importance of credit.

Having good or bad credit determines whether or not people can be approved to get credit cards, take out loans, buy cars, start businesses etc. Credit shows how financially responsible a person is based on how they pay their bills and what debt they are in.

Discuss the nature of information management

Information management is the concept of storing information on various data and applying it to business sectors such as marketing and finance.

Describe concept of insurance.

Insurance is the practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a premium

Explain the nature of financial needs (e.g., college, retirement, wills, insurance, etc.)

Insurance, Investments/Savings, Loans, Bills, College, retirement, wills, pension Needs that are essential for daily life, both short term and in the future

Explain the purpose of internal accounting controls

Internal controls are the mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Discuss the nature of risk control (i.e., internal and external)

Internal: Internal risks are faced by a company from within its organization and arise during the normal operations of the company. These risks can be forecasted (human factors, technological factors and physical factors) External: External risks come up due to economic events that arise from outside the corporate structure. Cannot be controlled or forecasted (economic factors, natural factors, and political factors.) Control: The best way to manage business risk is to maintain an adequate level of capital. A company needs capital to carry credit insurance A company with a higher level of business risk should choose a capital structure that has a lower debt ratio to help ensure it can meet its financial obligations at all times.(plane analogy)

Describe the nature of cash flow statements.

Measure how much money is coming into and going out of a business Shows the business how much profit they are making and shows them where they may need to cut spending to make a higher profit

Discuss the issuance of stock from a corporation

Issuance of stock is linked to the maximum amount of shares a company can issue to its shareholders. This is usually made up of the total of outstanding treasury stock and shares, as well as shares the company has regained ownership of. Issued stock refers to the shares that the company is able to sell.

Explain legal responsibilities associated with financial exchanges

Legal responsibility=the officially recognized acs enforced by the gov and conducted by a business or individual in exchange for goods or services financial capacity to pay; rules and regulations to govern acceptable conduct in securities exchanges

Explain the concept of management

Management is defined as getting work done through the effort of others. It is the process of reaching goals through the use of human resources, technology, and material resources. Businesses may have a vertical organization, with top, middle, and supervisory-level management. Or they may have a horizontal organization in which management shares decision making with teams of workers. Management functions include planning, organizing, and controlling the use of resources. Each of the functions requires making decisions. Planning involves setting goals and determining how to reach them. Organizing includes setting a time frame and assigning employees to do the work. Controlling refers to setting standards and evaluating performance.

Explain the nature of managerial cost accounting (e.g., activities, costs, cost drivers, etc.)

Managerial accounting is the process of identifying, measuring, analyzing, interpreting and communicating information for the pursuit of an organization's goals. This branch of accounting is also known as cost accounting. The key difference between managerial and financial accounting is managerial accounting information is aimed at helping managers within the organization make decisions, while financial accounting is aimed at providing information to parties outside the organization.

Describe functions of money (medium of exchange, unit of measure, store of value)

Medium of Exchange: When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange. Unit of Account: It is a standard numerical unit of measurement of market value of goods, services, and other transactions. It is a standard of relative worth and deferred payment, and as such is a necessary prerequisite for the formulation of commercial agreements that involve debt. To function as a unit of account, money must be divisible into smaller units without loss of value, fungible (one unit or piece must be perceived as equivalent to any other), and a specific weight or size to be verifiably countable. Store of Value: To act as a store of value, money must be reliably saved, stored, and retrieved. It must be predictably usable as a medium of exchange when it is retrieved. Additionally, the value of money must remain stable over time.

Describe types of business models

Manufacturer - takes raw material and creates product Distributor - makes product available to retailers Retailer - sells product to consumers Franchise - includes all 3 functions/models

Explain the nature of operations

Operations can be defined as the daily activities that provide successful outputs for the business. Some common types of operations are facility management, logistics, scheduling, information management and safety and security.

Identify factors affecting a business's profit

Profit is the monetary return a business' owner receives for taking the risk of investing in the business. In simple terms, profit equals income less expenses. More specifically, there are two types of profit: gross profit and net profit. Gross profit is the money left over after the cost of goods is subtracted from income from sales. Net profit is the money left over after operating expenses are subtracted from gross profit. Factors that affect profit include demand for the good/service, expenses, prices, the economy, and chance. To try to increase profit, a business can increase worker efficiency, increase sales, and/or decrease expenses.

Describe sources of securities information

Public companies make information available through a variety of documents. Annual reports highlight the company's performance and changes over the past year. A 10-K report is filed annually with the Securities and Exchange Commission. Companies often provide quarterly reports to shareholders, as well. An 8-K report is filed when a major company event that affects its securities takes place. In addition, many companies publish news bulletins. Other sources of information include newspapers, magazines, and other periodicals. The Wall Street Journal is one of the most respected sources of financial information, as are Investor's Business Daily, The New York Times, Barron's, Business Week, Forbes, and Fortune. Other publications are specific to investment advisory information, such as Moody's, Value Line Investment Survey, and Standard and Poor's Stock Guide. Securities brokerages also have numerous resources and internal reports for securities advice and information. Finally, there are numerous websites, as well as television and radio programs offering assistance.

Identify quality-control measures (SP)

Quality control is a process through which a business seeks to ensure that product quality is maintained or improved and manufacturing errors are reduced or eliminated. Quality control requires the business to create an environment in which both management and employees strive for perfection.

Determine factors affecting business risk

Risk is the possibility of incurring a loss. Economic risks are those that can result in a financial loss. Pure risk is one that presents the chance of loss but no opportunity for gain. Speculative risks offer the chance to either gain or lose. Some risks are controllable, while others are not. Likewise, you can insure some risks while others cannot be insured. To manage risks, they can be avoided, transferred, insured, or assumed.

Explain the role of business in society.

Society needs business to work, even if it is just bartering or trading. Business shapes society (the state of the economy influences the way that people live). Business bring changes and innovations to society. Society also changes business by giving rules that they have to abide by (social norms).

Explain the nature of balance sheets

Summarizes a company's assets, liabilities, and shareholders' equity at a certain point in time Allow investors to see what the business owns, what it owes, and how much was invested in the company by shareholders

Explain the concept of supply chain

Supply chain is the sequence of processes involved in the production and distribution of a commodity. They include the manufacturer, vendor, wholesaler, retailer, and finally the consumer.

Discuss legal considerations in the finance industry

The 1999 Gramm-Leach-Bliley (GLBA) Act protected consumer information and prevented data breaches. Another recent legal action taken is the U.S. Securities and Exchange Commission (SEC) wanting to impose fees on market data (info on trades in U.S. financial markets). While the SEC's responsibility is to keep trade fair and equitable, many financial institutions are against this added cost to investment.

Discuss the nature of human resources management

The main duties involved in human resources management include recruiting, hiring, orientation and training, scheduling, handling employee complaints, assessing performance, discipline, and termination. Recruiting is the process of locating a pool of job applicants and selecting potential employees from this pool. The hiring process involves interviewing, background checks, and pre-employment testing. Orientation and training programs can be formal or informal, depending on the business. Employee complaints and grievances vary widely, but all should be taken seriously and confidentially. Employee evaluation is usually done annually, and it enables management to develop better, more productive workers. Handling discipline takes two forms: preventative and corrective. Termination is based on poor performance or bad behavior.

Explain the time value of money

The time value of money is the increase of an amount of money due to interest earned over time or dividends paid. It is the idea that money invested now is worth more later because you would earn interest or dividends on it. Interest is money you earn over time as a percentage of the principal, or the original amount of money on deposit. Finding the future value of your original deposit is called compounding. With compounding, your money increases in value faster and faster over time. Figure the future value of your money by multiplying the principal by the annual interest rate, and then adding the interest to the principal. You can determine this future value for as many years as your money will be in an account.

Explain types of business ownership.

There are four possible forms of business organization: sole proprietorship, partnership, corporation, and limited liability company (LLC). The choice depends on the financial and tax situation of the owner, the type of business, the number of employees, and the level of risk involved. Each has advantages and disadvantages to be explored. A sole proprietorship is a business owned and operated by one person. A partnership is a legal agreement between two or more people. The two types of partnerships are general and limited. A corporation is a legal entity created by a government statute authorizing individuals to operate an enterprise. A limited liability company is a hybrid of a partnership and a corporation. In an LLC the owners are shielded from personal liability while all profits/losses pass directly to the owners without taxation of the business itself.

Discuss the nature and scope of compliance in the finance industry

There are numerous regulations that must be followed in the finance industry. The Financial Industry Regulatory Authority (FINRA) was created by Congress to monitor the industry. FINRA performs regular, routine exams at financial firms to determine compliance including but not limited to the anti-fraud provisions of the Securities Exchange Act of 1934, the Securities Act of 1933, FINRA's advertising rules and Regulations of the Federal Reserve Board.

Describe types of business activities

There are six general business activities. Generating ideas is an important activity in that businesses must remain competitive with other firms. Businesses also need to raise capital to finance their operations. Another important business activity is employing and training human resources. Businesses buy and sell goods and services. Marketing is a group of activities that provide and distribute the goods and services wanted and needed by a business' customers. Another activity is that businesses must maintain records to track performance and make decisions.

Explain the types of economic systems.

Traditional: bartering and trading resources, goods, and services Command Economy: government controls the economy by how to use and distribute goods and services Market Economy: each person makes their economic decisions; government does not control who buys what; based on the laws of supply and demand Mixed Economic System: Market based economy where the government controls some aspects of what is sold, and who can buy

Explain the nature and scope of the financial-information management function

provides a business or client with realistic and objective numbers that project financial status and condition, for example, interpreting a financial statement may give a company a promising outline of their common procedures. Good financial information management defines a quality company.

Explain the nature of staff communication

Types of Staff Communication: Upward - subordinate -> manager (same dept.) Downward - manager -> subordinate (same dept.) Horizontal - same hierarchical level Diagonal - subordinate <-> manager (diff. depts.) Grapevine - circulation of rumors and unofficial info

Explain the nature of effective verbal communications

Verbal communication can be classified into two types, interpersonal communication and public speaking. Examples of interpersonal communication, communication between two or more individuals, include talking with friends and having a family meeting. Important aspects to interpersonal communication include what you say and the atmosphere you're in, especially when making a first impression. Public speaking, a more formal version of verbal communication, involves speaking to a group of people. The purpose for public speaking can vary from sharing information to persuasion. Aspects: Language, Etiquette, Strategies, Visual Aids, Considerations.

Describe techniques used to analyze customer financial information

Vertical Analysis: Analyzing a single period financial statement works well with vertical analysis. Express all accounts other than net sales as a percentage of net sales. Horizontal Analysis: the comparison of data sets for two periods. Financial statements users review the change in data much like an indicator. Trend Analysis: Review of three or more financial statement periods typically represents trend analysis, a continuation of horizontal analysis. Ratio Analysis: Ratios express a relationship between two more financial statement totals, and compare to budgets and industry benchmarks. Five common categories of ratios exist: liquidity, asset turnover, leverage, profitability, and solvency.

Identify types of currency (paper money, coins, banknotes, government bonds, treasury notes, etc.)

currency: tokens used as money in a country paper money: includes banknotes, checks, drafts, notes - represent money in liquid form banknotes: promissory note issued by bank, intended to circulate as money government bonds: debt instrument (1+ years) issued by gov't to raising capital by borrowing treasury notes: debt obligation issued by gov't, with maturity between 1 and 7 years

Build and maintain relationships with customers

dependable income, touch base frequently,-be prompt/ organized, respect/care -especially important with small businesses, communicate openly, honesty

Discuss the nature of customer relationship management

the combination of practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle. The goal is to improve customer service relationships and assist in customer retention and drive sales growth.

Describe marketing functions and related activities

• Marketing functions include 4 P's (Price, Promotion, Place, Product) • Selling • Distribution and storage • Any action taken by company will have consequences (Can be good or bad based on the decision) • Better 4 P's means more customer loyalty