Port Man PRime
Three Factors that effect the emigration supply curve
1. Increase in education 2. Increase in youth population 3. Increase in immigrant networks
Autarky
When a country does not trade with other countries
Trade Diversion
When tariff agreements cause imports to shift from low cost countries to higher cost countries. Is undesirable because it concentrates production in countries with a higher opportunity cost and lower comparative advantage. It decreases economic well being
GDP problems
1. does not factor in income earned abroad (GNI can) 2. Only legal market transactions 3. ignores and double counts certain costs (ex: pollution)
Nash Equillibrium
A set of strategies that are mutual best responses A set of strategies from which neither player would unilaterally deviate.
WTO
Administers the rules governing trade between its 153 members. Helps producers, importers, and exporters conduct their business and ensure that trade flows smoothly. Main Goals: attempt to liberalize trade, stop conflict & help countries succeed
Fixed Exchange Rate
An exchange rate policy under which a government commits itself to keep its currency at or around a specific value in terms of another currency or a commodity, such as gold. ****stable BUT subject to speculative attacks
OLI
Attempt to explain why MNE's choose FDI
Capital deepening
The increasing of capital resources at a faster rate than the increasing of the labor force, causing a rise in the capital-to-labor ratio
LM interpretation of Theta (In terms of TAA Generosity and FTA voting change)
Generosity of TAA in location C rises by 1 unit, the probability that the congressman in location C votes in favor of an FTA change is by theta.
Common Market
Group formed by countries within a geographical area to promote duty free trade and free movement of labor and capital among its members, usually have an external trade policy
M&A
Home country buys some or all of the shares of a preexisting foreign firm
Greenfield Investment
Home country firm establishes a brand new production facility in the foreign country that if fully owns
Exporting country: the export subsidy will
Hurt consumers and lower overall economic welfare of the exporting country
Comparative Advantage
The ability of a country to produce a g/s at a lower opportunity cost than competitors
International Capital Mobility
The movement of money between countries. It is hard to regulate in a free market in an efficient way, thats why most countries choose to keep it as part of the trinity and sacrifice one of the other two. International mobility of capital limits the freedom of policy makers to pursue domestic macroeconomic goals (such as full employment and stable prices). It also limits the ability of policy makers to tax capital.
Gains from trade
The net benefits from entering into voluntary trade. Increases when countries specialize in g/s they have CA in
Purchasing Power Parody
Theory that the nominal exchange rate will adjust so that the purchasing power of a currency will be the same in every country, this equalization is done through nominal exchange rate (E= home/foreign). Ex: big mac in India vs. US - identical product, when you compare indies currency with US, the big mac should cost the same in both countries
Horizontal Intra-Industry Trade
Trade of products that belong to the same industry
Intra Firm trade
Trade that takes place between two different industries and within a single firm 1 firm, one part is domestic one part is foreign -prices are arbitrary - firm designates prices -intangible assets -reduces dissemination risks
Flexible Exchange Rate
Value set by supply and demand *****allows for capital mobility and monetary independence
Nondiscrimination
WTO principle #1 -countries cannot discriminate between trading partners -permanent normal trade relations Exceptions: special groups, developing markets -can raise trade barriers against products that are traded unfairly
Predictability: Binding and Transparency
WTO principle #2 -promises to promote future opportunity 1. Binding agreements- agree to open their market, promotes security 2. Transparency- make trade rules clear and public
Resellers
a group that purchases finished goods for the purpose of selling those finished goods for a profit, renting, or leasing to consumers and other businesses?
import quota
a limit on the amount of a good that can be imported
Plant
a manufacturing facility, a warehouse distribution center, or office. A plant may simply store inventory, produce goods, render services, or make goods available for distribution.
heterogenous market
a market comprised of individuals with different product needs
Conversion
a marketing metric that signifies an event that occurs on a Web page that indicates the meeting of a predefined goal associated with the consumer's interaction with that page?
Product differentiation
a marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better than competing products.
trade barrier
a means of preventing a foreign product or service from freely entering a nation's territory
trade creation
a member country imports a product from another member country that formerly it produced for itself
Passing title of entrusted goods
a merchant who is not authorized to sell a good can only pass valid title to a good faith purchaser IF the true owner voluntarily transferred or entrusted the goods to the merchant.
production subsidy
a subsidy to every unit produced and not just to units that are exported
Variance of a single asset
equals the average squared deviation of observed values from their mean. higher variance indicates higher volatility or dispersion of returns/
Company code
an independent accounting unit. Balance sheets and Profit&Loss statements required by law, are created at the company code level.
what is the Annualized Return and what is the formula?
an investment may have a term less than 1 year. doing this makes it possible to compare across investment instruments with different maturities. Ex. if weeks: use 52 as numerator if days use 365 as numerator if months use 12 as Numerator R = return on investment N = # of periods in year.
Touchpoint
any direct interface between customers and a company (online, by phone, or in person)
Ch2
ethics and legal issues
Consumer generated Value
everyday people generate value instead of buying it. Creating ads on youtube, eBay
B2B marketing
exchange of goods and services from one org to the other. **Buy more than consumers. Example: Internet
Copyrights
exclusive right by the federal gov. to publish and sell various works (intangible)
Patents
exclusive, legal right to use a process or create and sell a product for 20 years (intangible)
Commitment
exclusively commited to eachother and find mutual relationships
Risk management
- a process that defines risk tolerance and measures, monitors, and modifies risk to be in line with that tolerance
Attributes of high-quality relationships
-trust -commitment -relationship satisfaction -mutual goals -cooperative norms
Utility
A measure of relative satisfaction from consumption of various goods and services that an investor derives from different portfolios
Casual looker
A shopper who really has nothing specifically in mind to buy.
Customer empathy
A sincere concern for the interests and feelings of the customer
Change plate
A small shelf located directly above the cash drawer
Marketplace
any location or medium used to facilitate an exchange.
countervailing duty
applied in order to counter export subsidies
Scope of Article 2A
applies to any transaction, regardless of form, that creates a lease." 2A-102.
ethnography
approach to research based on observations of people in their own homes and communities
go to market staretgies
approaches to approach the customer as they add values
Property, plant, and equipment (PPE), also referred to as tangible fixed assets
are assets used in the production of goods and services that the firms sells in order to generate operating income and cash flow. PPE Assets are: 1. tangible in nature 2. expected to be used for more than one year (or more than one operating cycle, whichever is longer) 3. Used in the production and sale of other assets, for rental to others, or for administrative purposes PPE includes land and land improvements; buildings, machinery and equipment; and furniture and fixtures. It also includes natural resources covered in Appendix B.
new to customers
are customers who have either identified a new need or have found a new category of solution for an existing need.
new to company
are customers won from competitors
Decreasing-charge methods
are depreciation methods that take more depreciation in the early years than in the late years of the asset's useful life. Acceleration of depreciation charges is based on the premise that an asset is often most productive in its early years of service. Thus, decreasing charge methods match higher depreciation expense with higher related revenues in the early years of the asset's life and match lower depreciation charges against lower related revenues in the later years. Accelerated depreciation generally results in constant total annual usage costs (depreciation expense and repair and maintenance expense) charged against income over the life of the asset. In the early years of the asset's life, there are high depreciation expenses but low repair and maintenance expenses. When the asset is older. there are high repair and maintenance expenses and low depreciation expenses. Thus, the decreasing-charge methods of depreciation result in a fairly constant level of asset utilization costs over the asset's useful life. (Exhibit 11.2 pg 592)
factors influencing SP ethics
company policies--code of ethics Values of significant others --relatives/friends --other sales people --managers laws
think pair share
complexity organizational/b2b high cost long term--total cost to maintain and use
Case Study
comprehensive examination of a particular firm or organization
Marketing analytics
comprises a group of technologies and processes that enable marketers to collect, measure, analyze, and assess the effectiveness of marketing efforts.
Security selection
An attempt to generate higher returns than the asset class benchmark by selecting securities with a higher expected return
Web scraping
describes the process of using computer software to extract large amounts of data from websites.
Cross sectional design
descriptive technique uses instruments such as questionnaires to systematically collect info from one or more consumer samples at a single point in time
Capital Controls
Any measure taken by a government, central bank or other regulatory body to limit the flow of foreign capital in and out of the domestic economy. This includes taxes, tariffs, outright legislation and volume restrictions, as well as market-based forces. Capital controls can affect many asset classes such as equities, bonds and foreign exchange trades.
Project Initiators
Anybody who submits projects to be considered for investment by the portfolio.
implications
Approaches for changing perceived value •Increasing performance rating f •Decreasing the rating for competitive product •Increasing or decreasing weight •Adding a new dimension •Decreasing the price of the product
needs gap
desired state vs. actual state
Wants
desires to satisfy a need in a particular way Influenced by history, past exp., and culture
political influence
despite declining farm number still influenced politically
qualify the lead
determine whether a lead is in fact a prospect
Compensation Plans
Attract, retain & motivate sales staff. Control salespersons activities Be competitive & yet economical Be flexible
phases of relationship development
Awareness Exploration Expansion Commitment Dissolution
Contingent claims (options)
Contract between two parties that gives one party the right to buy or sell an underlying asset or to pay or receive a known underlying rate
Formation
Contract for sale of goods may be made in any manner sufficient to show agreement, including conduct of the parties. Contract may exist even if unable to determine exact moment of formation
Portfolio review team (PRT)
Cross functional team consisting of Subject Matter Experts in finance, marketing, engineering, R&D, IT, operations, etc.. Governance body responsible for monitoring portfolio progress and resolving issues.
Why get the customer involved
Involve the customer in the presentation setup: Involve the customer in the product demonstration: Involve the customer (prospect) while explaining a service: Involve the customer with ideas and questions:
Portfolio evaluation criteria
Criteria which need to be assessed in order to enable prioritization of the project.
,users
Manufacturing personnel for OEM products and capital equipment Do not make the ultimate purchase decision
trade secrets
Information owned by the company by which the company gains a competitive advantage
Excuses
Insincere reasons given by customers to delay making a purchase order to avoid becoming involved in the sale
Surety bond
Insurer promises to pay an insured a certain amount of money if a third party fails to fulfill its obligation
Hybrid/balanced funds
Invest in both bonds and stocks
Taxable money market funds
Invest in high quality, short-term corporate dept and federal government debt
Tax free money market funds
Invest in short-term state and local government debt with short maturities (overnight - 90 days)
Emerging markets
Investing in companies in emerging markets by purchasing corporate or sovereign securities
Buy-side firm
Investment management companies and other investors that use the services of brokers/dealers
Risk seeking
Investor gets extra "utility" from the uncertainty associated with the gamble
Investment decision
Investor identifies the optimal risky portfolio
Risk neutral
Investor is indifferent about the gamble or the guaranteed income; only concerned with return, not risk
subordination
Paying larger sums of money
lubrication
Paying small sums of money or gifts
kickbacks
Payments made to buyers based on the amount of orders placed
•Kickbacks:
Payments made to buyers based on the amount of orders placed
bribe
Payments made to buyers to influence their purchase decisions
•Bribes:
Payments made to buyers to influence their purchase decisions
Defined contribution pension plan
Pension plan in which contributions rather than benefits are specified; employee accepts investment risk and is responsible for ensuring there are enough funds in the plan to meet their needs
Cashiers
People who record sales on the cash register,make change, and wrap merchandise, while maintaining a good relationship with customers.
perceived risk
Perceived risk is an element of psychic cost. Perceived risk takes a variety of forms - performance, physical, financial, social and psychological.
free on board (FOB) destination
Seller has title until goods are received at destination
Customer oriented selling
Selling based on satisfying the needs and wants of the customer; also called personal selling
Rebalancing policy
Set of rules that guide the process of restoring the portfolio's original exposure to systematic risk factors
CAPM-based measures
Sharpe Ratio Treynor Ratio M^2 Jensen's Alpha
Demonstration
Showing an emphasizing the features and benefits of a product or service
Demonstration method
Showing or demonstrating that the product can do something that will answer the customers objection
Scenario analysis
Shows the changes in key financial quantities that result from given economic events; a risk management technique involving the examination of the performance of a portfolio under specific situations
Daily balance form
Shows the summary of the days sales and Money received, using the balance in the cash drawer and the detailed audit tape
Brian Drain
Significant emigration of educated or talented individuals due to better professional opportunities in other countries or from people seeking a better standard of living.
Settlement risk
Similar to default risk, deals more with the settling of payments hat occur just before a default
Modern portfolio theory (MPT)
The analysis of rational portfolio choices based on the efficient use of risk
Charge credit
The business will record the amount of the original sale on a sales receipt as a payment received on account in the customers name
Portfolio Management Framework (PMF)
The central repository containing a description of the agreed Portfolio Management practices adopted by the organisation and its governance arrangements.
Land
The cost of land generally includes the purchase price, development costs, legal fees, closing costs,delinquent property taxes, the costs of grading and clearing the land, and a portion of the interest costs incurred during the development process. In addition, firms consider the costs to remove an old structure, net of any proceeds on the sale of scrap materials, as part of the land's acquisition cost, because these costs are required to bring the land to the condition necessary for its intended use.
Buildings
The costs of buildings includes any acquisition or construction costs, as well as legal and closing costs similar to those incurred in the acquisition of land. In addition, firms may capitalize interest on financing employed during the construction period as part of the building under construction.
Attention
The customers first mental stage in the buying process, in which the customer becomes aware of a need or want for a product or service.
Tactical asset allocation
The decision to deliberately deviate from the policy exposures to systematic risk factors with the intent to add value based on forecasts of the near-term returns of those asset classes
Credit limit
The maximum amount customers can charge to their account before paying all or part of the balance
Systemic Risk
The risk inherent in the entire market or an entire market segment. Also known as undiversifiable risk or market risk.
free trade area
a group of countries agreeing to eliminate tariffs among themselves but keeping whatever tariffs they formerly had with the rest of the world
market
a group of individuals or organizations that have a desire or need for products in a product classed have the ability, willingness, and authority to purchase those products
target market
a group of people or organizations for which business creates and maintain marketing mix
5 phases for responding to objections
explore, listen, restate, respond, move on
trade surplus
exports are greater than imports
trust
extent of the buyers' confidence that allows them to rely on the salesperson's integrity
customization
has both cost and revenue implications. may mean the loss of economies of scale thus increasing unit costs. means that companies have to be aware of and responsive to customers' differing requirements. configurator technologies assist in customizing products. has been the norm in B2B markets for many years. any of the 7Ps of the marketing mix can be customized.
Churn Rate
he percentage of a company's customers (within a given span of time) who by the end of that time span have defected.
frequency
the average number of times that a targeted audience member is exposed to an ad or campaign
Lessee
i. Party that identifies the goods to be leased ii. Person who acquires the right to possession and use of goods under a lease (§ 2A-103(1)(n))
absolute advantage
in the production of a good relative to another country if it can produce the good at a lower cost or with higher productivity
Cost per click
in which the cost of the advertisement is charged only each time an individual clicks on the advertisement and is directed to the Web page that the marketer placed within the advertisement.
Value Chain activities
inbound logistics, operations, outbound logistics, marketing and sales, service
Multi-dimensional risk
include one where portfolio risk is evaluated based on the risk profiles of underlying asset classes (equity, fixed income, etc.), and another risk-factor approach where exposure to various risk factors is used to capture associated risk premiums (value stocks versus growth stocks).
Acquisition Cost
includes the costs necessary too bring the asset to the location and condition for its intended use
Big Data
increases ability of marketers to create better products or improve customer service
Arguments for free trade
increases competition, allows domestic goods to be sold all over world, allows country to expose comparative advantage through specialization
Convenience sample
individual who happen to be available where and when the data is collected
influencers
individuals within an organization who guide the decision process by making recommendations and expressing preferences
deciders
individuals within an organization who have the ultimate responsibility of determining which product or service will be purchased
initiators
individuals within an organization who identify a need
business market
individuals, organizations, or groups that purchase a specific kind of product for resale, direct use in producing other products
Secondary data research
info that has already been collected for some purpose other than the one at hand
Customer relation management system
info transmitted electronically to the company its sales people and its customers and is contained in this system
World Bank's historical periods
infrastructure project lending, poverty alleviation, structural adjustment lending
What are "moments of truth"
instance of contact or interaction between a customer and a firm that gives the customer an opportunity to form an impression about the firm.
Services
intangible products that we pay for and use but don't own. **Contribute to more than 75% of GDP
Mobile Marketing
interacting with customers through the phone, prime factor for marketing future
Interest Receivable
interest income a business has earned but a customer/debtor has yet to pay
Intranet
internal corporate comm. network thats uses internet tech to lin
Relating to the Risk Management Framework what is risk infrastructure
people, systems & tech required to track risk exposures and conduct quantitative risk analysis.
lead
person or organization that may or may not have what it takes to be a true prospect
Opinion leader
person who influences others' attitudes or behaviors because they believe that he possesses expertise about the product
personal selling/email
personal and paid (costly but flexible)
word of mouth
personal unpaid (Credible)
Strategic planning
plays an important role in modern corp. optimizes revenue, minimizes risk in global env., serious of dev. growth strategies
targeting policy
policy that achieves the objective most directly
ETF's
portfolio of securities designed to track the performance of a specified index. purchases large number of shares in same proportion as index it tracks. these are traded in the secondary market. pay out dividends.
Prepaid Insurance
portion of an insurance premium that has been paid in advance and has not yet expired
Protectionism vs free market trade -/
practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quotas/ prices determined by the open market, no government interference.
Customer lifetime value
present-day value of all net margins earned from a relationship with a customer, customer segment or cohort
MROC
privately assembled group of people usually a market research form utilize to gain insights into customer sentiments and tendencies
differentiated targeting strategy
organization directs its marketing efforts at two or more segments by developing a mix for each segment. Benefit is that a firm may increase sales within the total
Database
organized collection of data that can be searched and queried to provide information about contracts, products, and customers
institution
organized markets
benefit competitors
other companies delivering the same benefit to customers. These might include window replacement companies, heating and air-conditioning companies and bathroom renovation companies.
product competitors
other companies marketing kitchens to customers seeking the same benefit.
Advertising
paid impersonal (control)
Perception
process by which people select, organize, and interpret information from the outside world
market segmentation is the best approach for a heterogenous market
process for diving a market into groups/segments with similar product needs
Consumer behavior
process individuals or groups go through to select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires
What is risk transfer?
process of passing on risk to another party
Marketing information systems
process that determines what info marketing managers needs, then stores, sorts, and analyze and distribute relevant and timely marketing information to users.
form utility
processing
slice of life
product being using in a recognizable context
potential sales can be measured along several dimensions:
product level, geographic area, time, and level of competition
Product strategies (Market plan)
products design, packaging, branding, unique benefits
profit margin
profit ------- revenue
Equipment
property (not land/buildings) that is used in the operations of production
Arguments against free trade
protects infant industries, hurts domestic workers, labor standards are not the same, protect national security
response rates
provide a total number of a targeted audience that is exposed at least once at a particular ad or campaign
institutions
public and private purchasing rules and procedures are as complex and rigid as those government agencies
Official Reserve transaction
purchase and sale of the domestic currency by the central bank for purposes of influencing the exchange rate. *purchase of its own currency is a credit (+) *sale is a debit (-).
Bhavioral loyalty
purchase of same product from same vendor overtime
5. consumers
purchase products and services for use by themselves
Convertible Arbitrage funds
purchase securities such as convertible bonds and simultaneously take short positions in related equity securities.
consumer markets
purchasers and household members who intend to consume or benefit from the purchased product. DO NOT buy products to make a profit
Types of assessment criteria
qualitative and quantitative
Assets
resources of a company
Sales organization
responsible for distributing goods and services, negotiating sales conditions, carrying out the business transaction. It is the level to which you sum up sales figures for reporting and analysis.
Capital Gains or losses
resulting in changes from market price
What is self insurance? this is relating to risk acceptance.
retaining exposure to a risk that is considered undesirable but is too costly to eliminate by external means.
slope
rise ------ run
What is Model Risk? this is relating to non financial risks
risk of a valuation error resulting from using an incorrectly specified model or improperly using a valid model.
characteristics of a successful sales person
self motivated listening creative communication ethics analytical flexible confidence info tech skils
price discrimination
seller giving unjustified speical prices disocunts or services to some customers and not to others . must prove 1. differences in the cost of sales manfact and deliver 2. quality or nature of product deliv 3.an attempt to meet prices offed by compets ---price can change with volume
price discrimination
selling a product at different prices to different buyers
missionary sales people 3m
selling put does not take orders ----pharam. sales i sell the drugs but dont have them
Value Chain
series of activities involved in designing, producing, marketing , delivering, and supporting any product.
sales dialogue
series of conversation between buyers and sellers to forge a relationship for:
Channel Distribution
series of firms or individuals that facilitate the movement of the product from the producer to the final customer. (Place) Example: Clothing===>local retailers
dry cleaner's
service where you can clean your clothes
laundry
service where you can wash your clothes
distribution channles
set of people and organizations responsible for the flow of products and services rfom the producer to the ultimate user
What is the arithmetic or mean return?
simple average of all holding period returns. = (0.25 + 0.1 - 0.1 + 0.05 + 0.2) / 5 = 10%
SPIN
situation questions, problem questions, implied needs, need pay off
observations (personal)
situation where researchers record consumers
exam s
slide 33
concentrated demand
small number of large buyers account for most of the purchases
Cookies
small text files inserted by a web site on the user's hard drive, that the web site recognizes when that surfer returns to the site.
Types of relationship oyalty
solo exchnages functional relatoionship
Macro
something that affects whole marketing system
incentive
something that makes you act this or that way
Business defam
sp makes an unfari or untrue statement about compet, its prodds, or splls, illegal when damaging reputation
functional approach
specialized activities performed with in the marketing process
Set Marketing objectives (Market plan)
specific to the firm's marketing mix , help achieve goals, what firm wants to do
Define the research Problem
specify objectives, identify customer population if interest , place problem in environmental context
turnover
speed a product is sold
Avoidable interest
the interest the firm could have avoided if it had not borrowed funds to construct the plant asset.
most favored nation principle
the lower tariffs agreed to in multilateral negotiations must be extended equally to all WTO members
free trade
the lowering or elimination of protective tariffs and other trade barriers between two or more nations
company sales potential
the maximum percentage share of a market that an individual firm within an industry can capture
Distribution Channel
the means through which sales material reaches the customer (e.g. retail, wholesale, and direct sales).
raw customer retention
the number of customers doing business with a firm at the end of a trading period expressed as a percentage of those who were active customers at the beginning of the period.
Share of Customer
the percentage of an individual customer's purchase of a product that is a single brand?
Product positioning
the place a product occupies in consumer's minds based on important attributes relative to competitive products.
protectionism
the policy of imposing duties or quotas on imports in order to protect home industries from overseas competition
inbound sales
the power in the buying and selling process has shifted from the seller to the buyer
dumping
the practice of a Foreign firm exporting goods at a price that is below its own average cost of production. If the price charged for the exported good is above the firm's marginal cost, then dumping is profitable. We expect to observe dumping when the Foreign firm is acting like a discriminating monopolist.
Risk Management
the process by which an organization or individual defines the level of risk to be taken, measures the level of risk being taken, and adjusts the latter toward the former, with the goal of maximizing the company's or portfolio's value or the individual's overall satisfaction, or utility.
market segmentation
the process of dividing up a market into more-or-less homogenous subsets for which it is possible to create different value propositions.
networking
the process of establishing and maintaining business-related personal relationships.
consultive solving
the process of helping customers reach their strategic goals by using the products, services, and expertise of the sales organization
testimonial
the product is endorsed by an opinion-influencer
profit-adjusted retention rate
the profit earned from the retained customers expressed as a percentage of the profit earned from all customers who were active at the beginning of the period
foreign outsourcing
the provision of a service or the production of various parts of a good in different countries for assembly into a final good in another location
What is holding Period Return?
the return earned on an investment over a single specified period of time Formula: Multiply all returns against eachother and subtract 1 (convert % to decimal, ex: 10% = 1.1, -10% = .9.
Dissemination Risk
the risk of having firm specific assets/information leaked that could be detrimental to the firm
Operational risk
the risk that arises from within the operations of an organization and includes both human and system or process errors
missionary sales
the salesperson provides information to an individual who will influence the purchase decision.
Market potential
the total amount of a product that customers will purchase within a specific period at a specific level of industry-wide marketing activities
sales-adjusted retention
the value of sales achieved from the retained customers expressed as a percentage of the sales achieved from all customers who were active at the beginning of the period
geographic competitors
these are benefit and product competitors operating in the same geographic territory.
Convertible bonds
these are bonds that can be converted at anytime to equity in the company (shares). typically lower yielding. offer you a steady return with the chance of bigger gains if company successful and you convert to equity.
What is the Geometric mean return?
this accounts for compounding returns and does not assume amount invested in each period is the same.
What is market risk?
this arises from changes in interest rates, stock prices, exchange rates and commodity prices. These are generally caused by fundamental economic conditions or events in overall economy, industry, or company itself.
What is tail risk? this is related to non financial risks.
this includes events that have a small probability of occurring and occur at the ends of a normal distribution curve.
What is credit risk?
this is the risk of loss if one party fails to pay an amount owed on an obligation These are generally caused by fundamental weakness in the economy or industry or in demand for a company's products.
What is Liquidity Risk?
this is the substantial downward valuation adjustment when trying to sell an asset
What is settlement risk AKA Herstatt risk? This is relating to non financial risks.
this relates to default risk but has more to do with settlement of payments just before a default. -settlement risk can arise from timing of payment process, typically due to significant time zone differences.
relocate
to hange the place, move
Value for society
to make profits and contribute to society. Ex Target sets goals for seafood to be sustainable and traceable. Reusable bags, machine wash cold to lower energy
to pay in installments
to pay later
Data mining
to sophisticated analysis techniques to take advantage of the massive amount of transaction information now available
retention issues
too costly to serve strategic switchers constantly in search of a better deal not strategically significant in roles such as benchmark, door opener, inspiration or technology partner
Descriptive Research
tool that probes more systematically investigate marketing problem, results expresses in quantitative terms, large numbers
life cycle costing
total cost of ownership--determining the cost of equit or supplies over useful lives ----higher intial cost lower overall cost
Reach
total number of a targeted audience that is exposed at least once to a particular ad or campaign
4 Situations that result in no reversionary interest
transaction is a sale and not a lease in situations where the lessee cannot terminate the lease and any of the following four are true: 1)The original term of the lease is equal to or greater than the remaining economic life of the goods, or 2)The lessee must renew the lease for the remaining economic life of the goods or is bound to become the owner of the goods, or 3)The lessee has the option to renew the lease for the remaining economic life of the goods for no additional consideration or nominal consideration (deal is too good to turn down), or 4)The lessee has an option to become the owner of the goods for no additional consideration or nominal consideration at the end of the lease term.
Social insurance
transfer payments, employment practices *** ensure that market dislocation are managed and do not impede human development
Form Utility
transforming raw materials into finished products Ex: Dress manuf. combines materials to make a gown.
place utility
transportation
honest
truthfulness sincerity
agents
try o bring buyers and seller together
Billing (invoice)
usually occurs after the product has been shipped to the customer Billing creates credit and debit memos on the basis of requests, and transfers data posts to financial accounting
One-to-one marketing
utilizes the four steps: identify, differentiate, interact, and customize to facilitate a relationship with consumers?
Zeithaml's four forms of customer percieved value
value as low price value as whatever the customer wants in the product value as the quality obtained for the price paid value as what the customer gets for what the customer sacrifices
value in exchange
value is created by the firm, embedded in products, distributed to the market, and realized when those products are exchanged for money.
value in experience
value is realized only when customers possess, use, consume or interact with the good or service
value in use
value is realized only when customers possess, use, consume or interact with the good or service
Value for Customer Perspective
value is the ratio of perceived benefits to perceived costs.
balance of trade
value of all goods and services exported from a country minus the value of all goods and services imported from outside the country
Culture
values, beliefs, customs, and tastes a group of people values
regional trade agreements or preferential trade agreements
violates MFN because it allows favoring some member countries over others by providing preferential access through lower tariffs
Bounce Rate
visitors who enter the site, and bounce rather than continue viewing other pages on site
what aspects of the sales role might expose salespeople to more ethical dilemas than the typical employee?
walking in at a disadvantage bc cant say yes to everything -commission base -face of company as one individ
express warranty
way in which a salesperson gives warranty or guarantee to a customer, obligating the company to do the same
mission
what they want to reach
discriminating monopoly
when Home charges a higher price Foreign than domestically
Goodwill
when a company acquires (purchases) another entire company
trade surplus
when a country exports more than it imports
trade diversion
when a member country imports a product from another member country that it formerly imported from a country outside of the new trade region
concentrated targeting strategy
when an organization directs its marketing efforts toward a single market segment using one marketing mix. Allows firm to specialize
time-saving
when it helps you to safe time
money-saving
when it helps you to save money
prospect
when the salesperson determines that the lead is a good candidate for making a sale
cost-effective
when you have good result for little money
Distribution Strategies (Market plan)
when, how, and where the firm will make the product available to targeted customers.
What are surety Bonds?
where an insurer promises to pay the insured a certain amount of money if a third party fails to fulfill its obligation. popular in commercial contracts where one party bears the risk of potentially suffering a huge cost if another party does not perform. this assures one party that it bears no risk for the actions of a specified other party.
durable
works without problems for a long time
Notes Receivable
written promise to receive a certain amount of cash from another party at a certain date/s
Micro
you as an individual in the economy
reliable
you can trust it
managerial grid
Country club, team management, impoverished, produce of perish
Financing decision
Determine the optimal portfolio on the CAL (P)
Target asset allocation
Determines the weighting of asset classes to be included in the portfolio
74%
Digital marketing has become an increasingly important element of the marketer's toolbox. According to a survey conducted by Pew Research Center, ________ of Americans use at least one social networking site.
Benefits of customer service
Directly related to long term success, creates a culture when upper management motivates employees, based on customer perception
Confidential information
Disclosing confidential information, gives reputation of being untrustworthy
Periodic income
Dividends and interest income
EU
European Union - free movement of goods and workers across borders in European countries
Portfolio approach
Evaluating individual securities in relation to their contribution to the investment characteristics of the whole portfolio
Cross-tabulation
Exploring data by sub-groups in order to see how results vary across categories
Types of Warranties
Express and Implied
Customer complaint
Expression of dissatisfaction by the customer about a product, service, or store policy
Risk exposure
Extent to which the underlying environmental or market risks result in actual risk bourne by a business or investor who has assets/liabilities sensitive to those risks
Acquired Databases
Externally sourced databases can be used to collect various types of useful information Ex; Noncompeting businesses Government databases
Risk premium
Extra return investors can expect for assuming additional risk, after accounting for the nominal risk-free interest rate
Direct denial method
Handling objections by showing customers what they are wrong
strategically significant customers
High lifetime value customers High volume customers Benchmarks Inspirations Door openers But ... these may also be attractive to your competitors
Leverage buyouts
Highly levered transactions that use the company's cash flow to pay down debt and build the equity position
Hofmeyr's conversion model
Hofmeyr's basic premise is that customers who are not committed are more likely to be available to switch to another provider.
well it's made it so much easier
How the Internet has changed marketing (synthesis question of the whole chapter)
Modified rebuys:
Obtaining new information of a product or a similar product that was purchased in the past
Firm Offer
Offer by a merchant (even if no consideration) is binding, if: 1. The offer states that it will be held open for a time period (stated or reasonable) (no more than 3 months); 2. The offer is in writing; and 3. Signed by the offeror
Multi-Project Management
Often focuses on the management of the project portfolio from a controlling perspective and manages critical resources (usually financial only) across several independent and for resources competing projects only.
Fidelity bond
Often used to cover against losses that result from employee dishonesty
Magnuson Moss Warranty Act
Only applies to consumer products Advantages over Article 2: 1.Attorneys' fees possible 2.Federal ct. j/d may be possible 3.Definition of "consumer" broad enough to overcome many horizontal privity issues 4.Elimination of vertical privity concerns in cases of written warranties
Questions Marks
SBUs whose products have low market share in high-growth markets
Charge send
When customers charge an item and want it delivered
operant
When people learn that their actions result in rewards or punishments, the type of behavioral learning that occurs is _____ conditioning.
Branded
When the Lego Movie appeared, the intent was not necessarily to sell more Legos, but the firm did have a say in decisions about details of the movie. The movie itself is an example of
Asset Valuation: Determinable Market Value
When the face amount of a note does not reasonably represent the present value of the consideration give or received in the exchange (today's cash price), the accountant must then determine the proper valuation of the asset. Ex. notes payable are sometimes issued with a zero interest rate stated or at a stated rate that is significantly below the market rate of interest. If the asset's fair value is readily determinable or if the note is traded, the firm records the acquired asset at the fair value of the consideration given (the note) or the fair value of the consideration received (the asset), whichever value is more clearly evident. The difference between the face amount of the note and the fair value of the property (or the note) is called the discount, and represents the amount of interest to be deferred over the loan term. The discount on notes payable, (a contra liability) reduces the face value of the note payable to its present value. The firm reports the note payable's carrying value (its par or face value less the balance of the unamortized discount) - on the balance sheet
Depreciation
a decrease in the value of a currency as measured by the amount of foreign currency it can buy
Prepaid Rent
rent expense that was paid in advance of rental period
Utility function
represents the investor's preferences in terms of risk and return (ie. his degree of risk aversion)
Business Portfolio
represents the range of different businesses that a large firm operates. Ex; Disney operates multiple lines of business, theme parks, studio
Unobtrusive measure
require researchers to measure traces of physical evidence that remain after some action on the part of the consumer has been taken
Excuse from Performance - Impossibility
(1) Goods are identified at time of contract (2) Goods suffer casualty (3) Without fault of the party seeking excuse (4) Before risk of loss passes to buyer If total loss, contract is avoided If partial loss, Buyer may inspect goods and (a) avoid the contract or (b) move forward with allowance from contract price
Scope of Article 2
"Unless the context otherwise requires, [Article 2 of the U.C.C.] applies to transactions in goods." 2-102 some sections only apply to "sales"
Horizontal Privity
"Who can sue"
Research design
"plan of attack" what information marketers will collect and what type of study they will do
Lost Volume Seller Trigger Words
"supply exceeds demand"
Product
"utility and quality," good, a service, an idea, a place, a person-what ever a person or organization offers for sale. Example: Design, packaging, free delivery , "College Education"
Additional Terms in Acceptance or Confirmation
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms. (2) The additional terms are to be construed as proposals for addition to the contract. Between merchantssuch terms become part of the contract unless: (a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter it; or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received. (3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for salealthough the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act. 2-207
SOF Enforcement
(1) A promise which the promise should reasonably expect to induce action or forbearance on the part of the promise or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the promise...
Load funds
- charge either up-front fees, redemption fees, or both
Lease Formation
(1) Unless otherwise unambiguously indicated by the language or circumstances, an offer to make a lease contractmust be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances. (2) If the beginning of a requested performance is a reasonable mode of acceptance, an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.
Formula for calculating CLV
(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer)
Express Warranty
(a) Affirmation of fact or promise, (b) description, (c) or sample\model Created when made as BASIS OF THE BARGAIN
organizational support
*Boundary spanning employees: Employees who cross the organizational boundary and interact with customers or vendors •Should be given necessary support •Structure and culture •Training •Rewards
Execution (relating to portfolio management process)
- Asset allocation:distribution of funds between various asset classes. - Security analysis - portfolio construction: PM will construct the portfolio in line with the objectives outlined in the IPS. portfolio must be in line with clients risk tolerance level as specified in the IPS.
Sales is changing because of:
- Buyer's market - Social media - Short product lifecycle - Internationalism
Rodrik's Growth Diagnosis (not all the details, just the principles)
- Different approach from the Washington post discussing how to deal with effects of development developing countries suffer from multitudes of problems- ("distortions" or violations of conditions for social optimality) these distortions interact in potentially complicated ways, resulting in unanticipated consequences *** we need a reform strategy that is cognizant of the economics of the second-best ***use the decision tree rather than the one size fits all approach
Training course objectives
- Increase margin - Reduce number of errors - Reduce staff turnover
Demotive factors
- Poor leadership - Lack of teamwork - Unreasonable workload - Unfair business practices - lack of challenges
Advising steps
- Recap the exploratory call - Suggest ways the prospect can achieve their goals or overcome their challenges - Confirm budget, decision making processes, and timeline - Get buyer commitment
Risk transfer
- accomplished through an insurance policy - a deductible in an insurance policy means the insured is bearing some of the risk of loss and thereby (partially) self-insuring
Non-financial risks
- arise from actions within an entity or from external origins, such as the environment, the community, regulators, politicians, suppliers, and customers - consist of a variety of risks - settlement risk, operational risk, legal risk, regulatory risk, accounting risk, tax risk, model risk, tail risk, and sovereign or political risk
Market risk
- arises from movements in stock prices, interest rates, exchange rates, and commodity prices
Hedge Funds
- available only to accredited investors and are exempt from most reporting requirements - different hedge fund strategies exist - typical annual fee structure is 20% of excess performance plus 2% assets under management
Jensen's alpha
- based on systematic risk (beta) rather than total risk - measure of percentage returns in excess of those from a portfolio that has the same beta but lies on the SML
Treynor Measure
- based on systematic risk (beta) rather than total risk - Treynor measure is based on slope and has the same beta but lies on the SML
Asset classes
- building blocks of an asset allocation - an asset class is a category of assets that have similar characteristics, attributes, and risk-return relationships - investors have distinguished cash, equities, bonds, and real estate as the major asset classes
Mutual Funds
- combine funds from many investors into a single portfolio that is invested in a specified class of securities or to match a specific index - many varieties exist, including money market funds, both funds, stock funds, and balanced (hybrid) funds - open-ended shares can be bought or sold at the net asset value - closed-ended funds have a fixed number of shares that trade at a price determined by the market
Reduce Portfolio Risk
- combining assets w/ low correlations
Risk infrastructure
- comprises the resources and systems required to track and assess the organization's risk profile
risk of a two-asset portfolio
- dependent on the proportions of each asset, their standard deviations and the correlation (or covariance) between the asset's returns - as the number of assets in a portfolio increases, the correlation among asset risks becomes a more important determinate of portfolio risk
No-load funds
- do not charge additional fees for purchasing shares (up-front fees) or for redeeming shares (redemption fees)
Sharpe Ratio
- excess returns per unit of portfolio risk and higher Sharpe ratios indicate better risk-adjusted portfolio performance - the Sharpe ratios of all portfolios along the CML are the same - Because the Sharpe ratio uses total risk, rather than systematic risk, it accounts for unsystematic risk that the portfolio manager has taken - Sharpe ratio is the slope of the CAL for the portfolio and can be compared to the slope of the CML, which is the Sharpe ratio for any portfolio along the CML
Conditional Var (CVaR)
- expected value of a loss, given that the loss exceeds a minimum amount - relating it to VaR, the CVaR would be the expected loss, given that the loss was at least 200 million euros. It is calculated as the probability-weighted average loss for all losses expected to be at least 200 million euros - CVaR is similar to the measure of loss given default that is used in estimating risk for debt securities
Risk drivers
- fundamental global and domestic macroeconomic and industry factors that create risk
Security Market Line
- implementation of the CAPM and applies to all securities whether they are efficient or not - can assist in security selection and optimal portfolio construction
Common measures of risk
- include standard deviation or volatility; asset-specific measures, such as beta or duration - derivative measures, such as delta, gamma, vega, and rho - tail measures such as value at risk, CVaR and expected loss given default
Open-end fund
- investors can buy newly issued shares at the NAV - newly invested cash is invested by the mutual fund managers in additional portfolio securities - investors can redeem their shares (sell them back to the fund) at NAV as well - all mutual funds charge a fee for the ongoing management of the portfolio assets, which is expressed as a percentage of the net asset value of the fund
Risk tolerance
- key element of good risk governance - delineates which risks are acceptable, which are unacceptable, and how much risk the overall organization can be exposed to
Constraints when constructing a portfolio
- liquidity requirements - time horizon - regulatory requirements - tax status - unique needs
Nonsystematic risk
- local and can be diversified away by combining assets with low correlations - not priced
Risk-averse investors
- make investment decisions based on the risk-return trade-off, maximizing return for the same risk, and minimizing risk for the same return - concerned by deviations from a normal return distribution and from assumptions of financial markets' operational efficiency
Duration
- measure of the price sensitivity of debt securities to changes in interest rates
Standard Deviation
- measure of the volatility of asset prices and interest rates - standard deviation may not be the appropriate measure of risk for non-normal probability distributions, especially those with negative skew or positive excess kurtosis (fat tails)
Beta
- measures the market risk of equity securities and portfolios of equity securities - measure considers the risk reduction benefits of diversification and is appropriate for securities held in a well-diversified portfolio, whereas standard deviation is a measure of risk on a stand-alone basis
Real return
- nominal return adjusted for inflation - ex. an investor who earns a nominal return of 7% over a year when inflation is 2%. The investor's approximate real return is simply 7-2=5%. The investor's exact real return is slightly lower 1.07/1.02 - 1 =0.049 =4.9%
Indifference curve
- plots combinations of risk (standard deviation) and expected return among which an investor is different - indifference curves slope upward for risk-averse investors because they will only take on more risk (standard deviation of returns) if they are compensated with greater expected returns - an investor who is relatively more risk averse requires a relatively greater increase in expected return to compensate for a given increase in risk - more risk-averse investor will have steeper indifference curves, reflecting a higher risk aversion coefficient
Global minimum-variance portfolio
- portfolio on the efficient frontier that has the least risk
Separately Managed Accounts
- portfolios managed for individual investors who have substantial assets - in return for an annual fee based on assets, the investor receive personalized investment advice
Efficient Frontier
- portfolios that have the greatest expected return for each level of risk (standard deviation) make up the efficient frontier - the efficient frontier coincides with the top portion of the minimum-variance frontier - a risk-averse investor would only choose portfolios that are on the efficient frontier because all available portfolio with that are not on the efficient frontier have lower expected returns than an efficient portfolio with the same risk.
Minimum-variance portfolio
- portfolios that have the lowest standard deviation of all portfolios with a given expected return - together they make up the minimum-variance frontier
Risk can be modified
- prevention and avoidance - risk transfer (insurance) - risk shifting (derivatives)
M-square (M^2)
- produces the same portfolio rankings as the Sharpe ratio but is stated in percentage terms
Closed-end funds
- professionally managed pools of investor money that do not take new investments into the fund or redeem investor shares - the shares of a closed-end fund trade like equity shares (on exchanges or over-the-counter) - the portfolio management firm charges ongoing management fees
Security Characteristic Line
- regression line - line of best fit of all the securities - the slope of the security characterist line is (Covim/standard dev, m, squared) ie. same as beta
Strategic asset allocation
- results from combining the constraints and objectives articulated in the IPS and capital market expectations regarding the asset classes - as time goes on, a client's asset allocation will drift from the target allocation and the amount of allowable drift as well as a rebalancing policy should be formalized
Leveraged return
- return to an investor that is a multiple of the return on the underlying asset
Assumptions of CAPM
- risk aversion : to accept a greater degree of risk, investors require a higher expected return - utility maximizing investors : investors choose the portfolio, based on their individual preferences, with the risk and return combination that maximizes their (expected) utility - frictionless markets : there are no taxes, transaction costs, or other impediments to trading - One-period horizon: all investors have the same one-period time horizon - homogeneous expectations: all investors have the same expectations for assets' expected returns, standard deviation of returns, and returns correlations between assets - divisible assets: all investments are infinitely divisible - competitive markets: investors take the market price as given and no investor can influence prices with their trades
Liquidity Risk
- risk that as a result of degradation in market conditions or the lack of market participants, one will be unable to sell an asset without lowering the prices to less than the fundamental value - a.k.a transaction cost risk -arises from the uncertainty of the spread
Risk mitigation internally
- self-insurance (ie. setting up reserve fund to cover losses) - diversification
Capital Market Line (CML)
- special case of the capital allocation line, where the efficient portfolio is the market portfolio - obtaining a unique optimal risky portfolio is not possible if investors are permitted to have heterogeneous beliefs because such beliefs will results in heterogeneous asset prices - investors can leverage their portfolios by borrowing money and investing in the market - under the assumption of homogeneous expectations, this optimal CAL for all investors is termed the capital market line (CML)
Two-fund separation theorem
- states that all investors' optimum portfolios will be made up of some combination of an optimal portfolio of risky assets and the risk-free asset - the line representing these possible combinations of risk-free assets and the optimal risky asset portfolio is referred to as the capital allocation line - allows us to separate decision making into two steps - 1) the optimal risky portfolio and the capital allocation line are identified, which are the same for all investors 2) investor risk preferences enable us to find a unique optimal investor portfolio for each investor
CML vs. SML
- the CML uses total risk=standard deviation of portfolio on the x-axis - only efficient portfolios will plot on the CML - the SML uses beta (systematic risk) on the x-axis, so in a CAPM world, all properly priced securities and portfolios of securities will plot on SML - portfolios that are not well diversified (efficient) plot inside the efficient frontier and are represented by risk-return combinations
Risk exposure
- the extent to which an entity's value may be affected through sensitivity to underlying risks
Capital allocation line
- the line representing these possible combinations of risk free assets and the optimal risky asset portfolio - represent a set of possible efficient portfolios
Value at Risk (VaR)
- the minimum loss over a period that will occur with a specific probability - consider a bank that has a one-week VaR of 200 million euros with a probability of 3%, that means that a one-week loss of at least 200 million euros is expected to occur 3% of the time. Note that this is not the maximum one-week loss the bank will experience; it is the minimum loss that will occur 3% of the time. VaR does not provide a maximum loss for a period. VaR has become accepted as a risk measure for banks and is used in establishing minimum capital requirements
After-tax nominal return
- the return after tax liability is deducted
Legal risk
- the risk of being sued or the risk that a court will not uphold an agreement
Model risk
- the risk of using the wrong model for analysis or the risk of using the right model incorrectly
Credit Risk
- the risk that a counter party will not pay an amount owed
Tax risk
- the risk that the tax code could change, along with regulatory and accounting risks together form compliance risk
Risk governance
- the top-level foundation for risk management , including risk oversight and setting risk tolerance for the organization
Financial risks
- those that arise from activity in the financial markets - consist of market risk, credit risk, and liquidity risk
Tail risk
- uncertainty about the probability of extreme (negative) outcomes - commonly used measures of tail risk (sometimes referred to as downside risk) include Value at Risk and Conditional VaR
Investor that is less risk averse
- will optimally choose a portfolio with more invested in the risky asset portfolio and less invested in the risk-free asset
Value Proposition
-- the set of key benefits & values that the company promises to deliver to satisfy needs. 1. Salesperson must be prepared to substantiate the points presented during the sales presentation. 2.Salesperson must focus on key points of difference between your product & competitors (knowledge)
Features VS Benefits
---Features.. are the tangible and intangible qualities (or facts) of a product or service. They are the same no matter who uses them. ---Benefits... Are the value to the customer Translating features into benefits is one of your most important skills.
Open-ended questions
--Identify a topic but do not provide structured alternatives 1. Allows the prospect to move in any direction 2. Cannot be answered with a yes or no 3. Ordinarily begins with "How do you feel?" or "What do you think?" 4. Stimulates the prospect's thinking and increases the dialogue 5. Helps uncover the dominant buying motive 6. Uncovers the true personality or behavioral style of the prospect
Government Agencies
--Purchase goods and services valued at more than $1trill --Develop detailed specifications for a product and then invite qualified suppliers to submit bids --Contract is awarded to the lowest bidder --Conduct small purchases without bidding ---Require a thorough knowledge of unique procurement procedures and rules
Close-ended questions
--Structured Alternatives, Multiple Choice Type 1. Uncover Specific Facts 2. Reduce prospect tension because they are easy to answer 3. Check understanding and receive feedback 4. Maintain control by directing the flow of conversation 5. Cement prospect commitment to a specific position
bribes rules
--motives==foster relationship not pay off someone --symbol of appreciattion, no string attached --doesnt violate policies --inexpencie with sale perosns log or name
Parts of the buyers journey
-Awareness -Consideration -Decision
Four stages
-identify -connect -explore -advise
preparation for data mining
-Define the business problem you are trying to solve. -Create a data mart that can be subjected to data mining. -Develop a model that solves the problem. This is an iterative process of developing a hypothetical solution to the problem (also known as model building), testing and refinement. -Improve the model. As new data are loaded into the data warehouse, further subsets can be extracted to the data mining data mart and the model enhanced.
Nonverbal Language
-Includes all aspects of appearance: grooming, clothing, accessories, and posture. - Effects first impressions even though it may actually provide limited or shallow insight into the true person. - Dress the Part -- We all wear uniforms: Choose accessories carefully, dress appropriately, give attention to grooming - You're projecting an image -- want the prospect to take you seriously, work with your physical characteristics - Some accessory tips -- Jewelry should be neutral and not related to an association or belief, should be of good quality, high quality pens, leather attache cases, avoid sunglasses while talking to prospects
Three types of CRMS
-Strategic -Operational -Analytical
Buying Motive
-What's driving your need for change? -What do you hope to accomplish? -If you can achieve this result, what will it mean to you? -What originally led you to this decision?
account based segmentation variables
-account value -share of category (share of wallet) spend -propensity to switch
types of competitor
-benefit competitors -product -geographic
b2b
-concentrated geographically -group decision -very close interaction -complex customized product -negotiated price -primary role to personal selling -direct channels
production risks
-disease -hail storm -drought -livestock-death
Risk shifting
-hedging with derivatives
market segmentation process
-identify the business you are in -identify relevant segmentation variables -analyse the market using these variables -assess the value of the market segments -select target market(s) to serve
Buyout Funds
-involve taking a company private by buying all available shares, usually funded by issuing debt -the company is then restructured to increase cash flow -investors typically exit the investment within three to five years
Two types of new customers
-new-to-category -new-to-company
consumer goods
-numerous: wide geography -inidivid decision -very little close contacts -standard product -fixed price -mass advertising --indirect channels
The 7 P's of Customization
-product -price -promotion -place -process -people
Advising methods
-proposal -presentation or demo -contract
Three measures of customer retention
-raw customer retention rate -sales-adjusted retention rate -profit-adjusted retention rate
Pre-tax Nominal Return
-return prior to paying taxes - Dividend income, interest income, short-term capital gains, and long-term capital gains may all be taxed at different rates
What areas should a Risk Management Framework address?
-risk governance -risk identification and measurement -risk infrastructure -defined policies and processes -risk monitoring, mitigation, and management -communications -strategic analysis or integration
International Monetary Fund
-role was to lend money to countries to back the fixed exchange rate - used in many small developing counties who use fixed exchange rates to regulate their volatile economy - today flexible exchange rates are used so the IMF is not commonly necessary -Its outdated for todays global economy
Marketing risk
-selling price less than expected -buying prices is greater than expected
Venture capital funds
-similar to buyout funds except that the companies purchased are in the start-up phase -venture capital funds, like buyout funds, also provide advise and expertise to the start-up
execution styles of advertising
-slice of life -aspirational -testimonial -comparative
Planning (relating to portfolio management process)
-understanding clients needs - developing investment policy statement (IPS) this is a written document that describes the objectives and constraints of the investor.
When do customers experience value
-value in exchange -value in use -value in experience
Grounds for excuse of performance
1. Impossibility 2. Commercial impracticability 3.Frustration
Statute Of Frauds
1) Does the agreement trigger the SOF? If a sale of goods of less than $500, the SOF isn't relevant. If a sale of goods of $500 or more, the SOF is triggered and you need to go to #2. 2) Is there a sufficient writing? We want a sufficient writing to alleviate possibility of fraud. If we have a sufficient writing, then SOF isn't a bar and P can try to prove and enforce. If no sufficient writing, can't be enforced unless an exception. See #3. 3) Is there an exception to the SOF's writing requirement? If yes, then go ahead and try to prove and enforce the agreement. If no, then the SOF bars enforcement.
When does Parole Evidence rule apply
1) Evidence of prior written agreements [Question: "prior" to what?] 2) Evidence of prior or contemporaneous oral agreements. 3) Trade usage and the like.
When to answer questions
1. Anticipate and Forestall Objections -- Incorporate objections and the answers directly into the presentation. You should be certain that the objection will arise. Prevents a confrontation and communicates objectivity. Objection may come up again -- but it will have less impact the second time. Weave into your presentation factual answers to anticipated objections. 2. Postpone the Answer -- Acknowledge the objection, employ empathy, gives you time to present more benefits, allows you to maintain control, gives you time to think about your response, promise to get back to the question and write it down. If prospect absolutely insists, then answer it when it comes up. Used mostly when price concerns are stated before you are ready to answer. 3. Answer Immediately -- Allows the prospect to concentrate on the rest of the sales story. Shows the prospect your sincerity. Prevents prospects from inferring your inability to answer. Of all the objections, the price question should be answered after need, value, and benefits have been discussed.
Implied Warranty of Title
1. Arises w/ any sale of goods 2. Content of warranty (§ 2-312(1)): a. The title conveyed is good and its transfer rightful; b. The goods are delivered free from any security interest or other lien or encumbrance of which the B at the time of K-ing has knowledge 3. This is difficult to disclaim (§ 2-312(2))
Implied Warranty of Merchantibility
1. Arises when: a. There is a sale of goods b. By a merchant w/ respect to goods of this kind (NOT about just doing business) Content of warranty (§ 2-314(2)): a. Not about the goods being perfect b. Cts. tend to focus on whether the goods would pass w/out objection in the trade (§ 2-314(2)(1)) and whether the goods are fit for their ordinary purpose (§ 2-314(2)(c)) c. § 2-314 cmt. 6 leaves open other possible attributes of merchantability
How to determine whether PER applies
1. Assess the writing(s): Make sure you've got an integration. If not, no PER problem. If yes, continue. 2. Assess whether the terms are parol evidence covered by 2-202. If no, then don't worry about PER. If yes, go to #3. 3. Assess whether the term(s) contradict the integration. If yes, they don't come in. If not, keep going. 4. Assess whether the term(s) are consistent with the writing. If not, they don't come in. If consistent, keep going. 5. Assess whether the integration is a complete or total integration. If no, the terms come in. If not, any terms related to the agreement are barred.
Ways to Improve Listening Skills
1. Capitalize on Speed of Thought: -- We speak at 150 words per minute, but we can listen at up to 600 words per minute. 2. Use this spare thinking time to: -- Anticipate where your prospect is going, mentally summarize the message, formulate a response, listen between the lines, use silence strategically 3. Maintain an open mind -- avoid prejudgement, be patient, take notes, reinforce -- paraphrase the customers meaning - ask questions to make sure you understand -- let the speaker know you are listening, listen for ideas, do not try to get every word, focus your full attention -- get rid of distractions, make & maintain eye contact, think about what the speaker is saying -- not what you are going to say next, do not interrupt, listen to the words & try to picture what the speaker is saying, keep your body language neutral, realize that sometimes just listening is enough, be attentive yet relaxed, don't interrupt & don't impose your solutions, wait for the speaker to pause before asking questions, try to feel what the speaker is feeling, pay attention to what isn't said -- feelings, facial expressions, gestures, posture & other nonverbal clues.
Advantages of amplification questions
1. Checks for mutual understanding 2. Allows the salesperson to rephrase what the prospect appears to have intended 3. Invites the prospect to expand or clarify any point of disagreement 4. Narrows down generalizations and clears ambiguities
Org Elements
1. Company code 2. Sales organization 3. Distribution Channel 4. Division (2-4 are sales area) 5. Plant 6. Shipping point 7. Storage location
Delivery Overview
1. Completed sales order 2. Availability check 3. Delivery document 4. Pick (through a transfer order) & Pack 5. Shipping 6. Post goods issue, update inventory
Master data for sales
1. Customer master (who?) 2. Material Master (what?) 3. Condition pricing records (how much? Aka pricing records)
Adequate Assurance of Performance
1. Either party may seek adequate assurance of performance. a. Must be "reasonable grounds for insecurity," b. Must "in writing" demand c. Adequate assurance of due performance. 2.If no such assurance is given w/in a reasonable time of a justified demand (but not to exceed 30 days), the party that fails to give assurance is deemed to have repudiated the K 3.If they give assurance, proceed w/ K 4.Used when a party is worried that the other will not perform, but is not sure - real concern
Is it Parole Evidence
1. Evidence of prior written agreements 2. Evidence of prior or contemporaneous oral agreements 3. Trade usage and the like
Hierarchy to determine terms of the contract
1. Express terms of the contract 2. Course of performance - How the parties previously conducted the transaction AT HAND 3. Course of dealing - How the parties previously handled past contracts 4. Usage of Trade - Custom in a particular industry 5. UCC Gap fillers
Techniques in handling objections
1. Feel, Felt, Found -- Answer it by referring to a third party and using that experience as your "proof or testimony". If the source is reliable or reputable, this can be especially successful. Provide new facts which allow the prospect to reevaluate your proposition. 2. Compensation or Counterbalance Method -- Admit the objection is valid. Describe some counterbalancing benefit. 3. Relate a case history or testimonial -- describe the experience of a client whose situation is similar to that of the prospect. 4. Ask Why? or a Specific Question -- Excellent for separating excuses from real objections. Ask questions that turn a broad general objection into a specific concern that can be answered. 5. Deny the Objection. (Direct denial involves refuting the opinion or belief of a prospect.) -- Considered a high risk method of handling buyer resistance. If buyer resistance is not valid, there may be no other option than to refute it by providing accurate information. Be firm in stating your beliefs; be sincere and don't be defensive. 6. Indirect Denial (Sometimes prospect's objection is valid, or at least accurate to some degree.) -- Best approach is to acknowledge that the prospect is correct. If initially appears as agreement with the customer's objection. If done in a natural, conversational way it will not offend the prospect. Rephrase or have the prospect rephrase. Blame Yourself. Give the facts that answer the objection.
Contract Resale Damages
1. Formula: KP - RP + ID - ES 2.S's resale must be made in good faith and in a commercially reasonable manner a.Resale must be real and legitimate - in the ballpark of a reasonable market price b.Cannot simply sell the good to a family member for $1 and then recover rest from B c.All aspects of the sale must be commercially reasonable, including: i. Method ii. Manner iii. Time a)Reasonable time depends on "the nature of the goods, the condition of the market and the other circumstances of the case; its length cannot be measured by any legal yardstick or divided into degrees" § 2-706 cmt. 5 iv. Place v. Terms d.The resale price is usually considered in terms of reasonableness w/ the K price and NOT the FMV of the goods
Factors of first impressions
1. Four minutes is the average time that prospects take to decide whether to buy from you. 2. Visual Factors -- clothing, briefcase, grooming 3. Physical Actions -- shake hands, eye contact 4. Attitude -- friendly, enthusiastic 5. Professional habits -- on time, clear agenda, ability to answer questions 6. Building Rapport -- pronounce the prospect's name correctly, look for common ground
Consumer-Benefit Approach
1. Give the prospect a reason to listen 2. Suggest a risk for failure to listen
Product Approach
1. Hand the product, or some physical representation of it to produce a positive reaction 2. It stirs interest 3. Permits a demonstration 4. Makes a multiple sense appeal 5. If bringing the actual product is not feasible, you must use other devices: A piece of literature, sample, model, picture
Referral Approach
1. Helps you establish leverage by borrowing the influence of someone the prospect trusts and respects.
2 main differences between US GAAP and IFRS related to the capitalization of interest for specific borrowings
1. IFRS-reporting firms capitalize all borrowing costs related to a loan obtained specifically to acquire or construct the asset because the debt is used directly to finance the construction. Unlike US GAAP, there is no need to use the weighted-average accumulated expenditures to determine interest to capitalize for specific borrowing. The weighted-average accumulated expenditures are only used to determine interest to capitalize for general debt. 2. Income from the temporary investment of specific borrowings reduces capitalized borrowing costs Exhibit 11.1 on pg 586
Target market selection process
1. Identify the appropriate targeting strategy 2. Determine which segmentation variables 3. Develop market segment profiles 4. Evaluate relevant market segments 5. Select specific target markets
Risk of Loss Principles
1. If 1 party caused the loss, that party will generally bear the loss 2.The parties can make an agreement as to when risk of loss passes (§ 2-509(4)) 3.Otherwise, follow the rules in § 2-509 and § 2-510 a. If a breach is involved, consider § 2-510 1st
Benefits of Demonstration
1. Improved Communication and Retention: Attracts customer attention, adds sensory appeal, stimulates interest, creates desire for product. 2. Proof of Buyer Benefits (Evidence to Support Claims): 3. Proof Devices: Demonstration, Facts & statistics (3rd party & your own company), testimonials, photographs & video, customer data (case histories), reprints, samples 4. Feeling of Ownership -- During presentation (involved), Trial
US GAAP definition of an asset (3 characteristics)
1. It represents probable future economic benefits 2. The firm can obtain the benefit of the asset and can also control others' access to it 3. The transaction or other event giving rise to the entity's right to the benefit or control of the benefit has already occurred. Firms also require reliable measurement methods to record a cost as an asset. Identifying an asset involves differentiating between costs with probable future economic benefits and costs that have expired without the ability to generate revenue in subsequent accounting periods. Firms must also consider the cost-benefit tradeoff and materiality when measuring PPE. (Information is said to be material if omitting it or misstating it could influence decisions that users make on the basis an entity's financial statements.)
PPE Categories
1. Land 2. Land Improvements 3 Machinery and Equipment 4. Buildings Types of PPE include land, plant, equipment, and buildings.
Handling Objections- six step process
1. Listen carefully; Hear the prospect out. 2. Confirm your understanding of the objection -- clarify and classify the objection. Try to distinguish between genuine objections and excuses. 3. Acknowledge the prospect's point of view. -- Restate or rephrase in your own words. Use words such as, "I understand how you feel." Prepare the prospect for your answer. 4. Select a specific technique to base your decision on. -- the prospect's social style, phase of the interview, the prospect's mood, the number of times the objection has been raised, the type of objection (excuse versus a genuine concern or question). 5. Answer the Objection -- say just enough to answer it. 6. Attempt to close -- Continue the presentation if you do not succeed.
Trade Related Investment Measures
1. Local content requirement - requires that a certain amount of local input be used in production 2. Trade balancing - requires that imports be a certain proportion of exports 3. export performance - requires a certain share of output to be exported 4. Technology Transfer -requires that certain technologies be transferred 5. remittance restriction - limits the right of the foreign firm to repatriate profits 6. local equity requirement - restricts the amount of a firms equity that can be held by investors
Approach Objectives
1. Make a good first impression 2. Secure Attention 3. Develop Interest 4. Establish Credibility 5. Opportunity to make a sales presentation(if approach was effective.)
What sales managers do
1. Manages (organizes) sales staff (creates territories) -- Product organization, determine sales territories (one of the most important items that a Sales Manager must do.) , determining the size of the sales team. 2. Recruits 3. Trains 4. Budgets 5. Develops compensation plans 6. Grades sales force productivity 7. Motivates sales staff
3 triggers of motivation
1. Need of something 2. Protection of something 3. Threat, get something you do not want
Disclaiming Express Warranties
1. Once an express W is made, it is difficult to disclaim 2. Common scenarios a. Purported disclaimer is in written agreement containing description, promise, or affirmation of fact. b. Purported description, promise, or affirmation of fact was made prior to written agreement. 3. Cts. to try to construe words/conduct creating warranties and words/conduct disclaiming warranties as consistent. a. If such construction is not reasonable, words/conduct creating warranty prevail § 2-316(1) b. Therefore, disclaimers inconsistent w/ language of express warranties are denied effect to protect Bs from "unexpected & unbargained language of disclaimer" § 2-316 cmt 1. i. Example: A statement by S that the battery life will last at least 6 months, but a written W that disclaims express and implied Ws. → express W/statement prevails
Document Flow in Sales
1. Order 2. Delivery (picking request, goods request, delivery) 3. Invoice 4. Payments
Three major steps in Portfolio Management
1. Planning Step - creating an investment policy statement (IPS) that details the investor's investment objectives and constraints; should also specify an objective benchmark (such as an index return) against the success of the portfolio management process to be measured 2. Execution Step - analysis of the risk and return characteristics of various asset classes to determine how funds will be allocated to the various asset types; top-down analysis, a portfolio manager will examine current economic conditions and forecasts of such macroeconomic variables as GDP growth, inflation, and interest rates. Bottom-up security analysis is when you use model valuations for securities to identify those that appear undervalued 3. Feedback Step - portfolio manager monitor these changes and rebalance portfolio in response, adjusting the allocations to the various asset classes back to their desired percentages
Business Processes for Sales
1. Pre sales activities 2. Sales order processing 3. Inventory sourcing 4. Delivery 5. Billing 6. Payment
Objectives of using questions
1. Preplan your questions (customize) 2. Ask the right questions 3. To discover the prospects "hot button" 4. To establish purchase criteria 5. To agree upon a time frame for completion of negotiations 6. To gain agreement on the problem before beginning the actual presentation
Implied warranty of fitness for a particular purpose
1. Seller not required to be a merchant 2. Seller knows or should know buyer's purpose 3. Seller know buyer is relying on seller's skill\judgment 4. Buyer does rely
When does an offer invite acceptance?
1. Shipment of the goods 2. Promise to ship the goods Note - Non-conforming goods count as acceptance UNLESS seller seller specifies that the non-conforming shipment is an accomodation
Education Approach
1. Show your knowledge of trends in their industry or market 2. Would work well in a virtual meeting
Compliment Approach
1. Signals your honest interest in the prospect 2. Make it sincere, specific, and of genuine interest
5 methods for overcoming the price question
1. Price vs. Value vs. Cost -- Your job is to establish value, not price. Look at the price-quality-value mindset. Talk about the initial price versus the ultimate costs. 2. Price Breakdown -- Break the price down - by day, week, or month (lowest denominator) 3. Presumption of Exclusivity -- Stress the special features that only your product can offer. Sell quality and uniqueness if the buyer argues price. Must be an expert about your industry and product line. Make your price seem unimportant in comparison to the value received. Draw the picture clearly and convincingly -- most buyers are fair-minded. 4. Comparison Method -- When prospects are mentally comparing their present product with your product, make a complete comparison of the two. A demonstration can give a convincing answer to an objection. Comparison of your product's features, advantages, and benefits against competitors. Do a comparison of long-run costs and savings. Use your company's reputation to build trust and justify the higher price. 5. Sell Down Method -- The common law of business balance prohibits paying a little and getting a lot. Be patient, focus on the benefits, and let the buyer tell you what features he can live without. There is a price point below which the buyer will not want to go. All prospects have a purchasing or buying range, find it. Unbundle.
Steps in Sales Process
1. Prospecting 2. Preapproach 3. Approach 4. Needs Discovery 5. Presentation 6. Handling Objections 7. Close the Sale 8. Post-Sale Customer Service
Purpose of Presentation
1. Provide knowledge using the features, advantages, and benefits of your product, marketing plan, and business proposal. 2. Allow buyer to develop positive personal attitudes toward your product and you. 3. Convert need into want and into the belief that your product can fulfill those wants. 4. Convince the buyer that not only is your product the best, but also that you are the best source to buy from.
Question Approach
1. Quickly establishes 2-way communication 2. Suggests interest in the prospects problem 3. Allows you to apply your benefits
Limiting Remedy
1. Reasonable agreements limiting or modifying remedies are to be given effect § 2-719(1)(a); cmt. 1. 2. Can also have an exclusive remedy; however, it must be clear that it is an exclusive remedy and it cannot be unconscionable a. Unconscionability serves as a check § 2-719 cmt. 1; § 2-302 b. Although consequential damages can be limited or excluded, it is prima facie unconscionable to limit consequential damages for personal injury in the case of consumer goods c. Although in K law you consider the time the K was made for unconscionability, under the UCC, consider how the deal panned out
Court options if Unconscionability is found
1. Refuse to enforce the K at all, 2. Enforce the rest of the K w/out the unconscionable term, or 3. Limit the application of an unconscionable term to avoid an unconscionable result. 4. Most cts. cannot give restitution!
What is legal risk? this is relating to non financial risks
1. Risk of being sued for something entity does or fails to do. 2. risk of contract not being upheld by legal system.
Sales AREA
1. Sales organization 2. Distribution Channel 3. Division
Qualifying Question Approach
1. Seeks a commitment from a prospect 2. Determine if prospect is cold, lukewarm, or red-hot
Implied Warranty of Merchantability
1. Seller is a merchant 2. Pass without objection in the trade 3. Fair and average quality 4. Fit for the ordinary purpose the goods are used for
Asset class
A category of assets that have similar characteristics, attributes, and risk-return relationships
SPIN
1. Situation Questions: Data-Gathering Questions Uncover Facts and Background Information. -- Do you handle the collection of overdue accounts internally? 2. Problem Questions: Here You Help Prospects Define Their Needs Explicitly -- Do you know how much it costs to do your collecting internally? 3. Implication Questions: Get The Prospect To Discuss The Problem And How It Might Be Improved -- Would it be important to you to recover a large share of delinquent accounts & bad checks faster than you are currently able to do? 4. Need - Payoff Questions: Help To Build Up The Value Of Your Proposed Solution In The Customer's Mind. -- If you could design the perfect collection agency, what would you want them to do for you?
Question Types
1. Survey Questions -- Information gathering questions designed to obtain knowledge. Discovers basic facts about the buyers existing situation. Not to be used for factual information one could acquire from other sources prior to the sales call. 2. Probing Questions -- Help to uncover and clarify the prospect's buying problem and circumstances. Obtain more specific information to fully understand the problem. 3. Confirmation Questions -- Verify accuracy and assure a mutual understanding of information exchanged.
Weaknesses of first impressions
1. Tend to be based on emotions 2. All behavioral traits do not show up immediately 3. Behavior may be deliberately controlled by either party 4. An earlier event may influence either person's current behavior
Types of closes
1. The Direct Close -- Has the advantage of clarity and simplicity. Ask for the order in a straightforward manner. Most direct closing approach and appeals to many buyers, especially decisive people. Should not come too early. Highly effective when salesperson has earned the customer's respect. 2. Trial Close -- Can be used at any time during the sales process. May elicit a negative response because buyer is not ready to purchase. A trial close that works becomes the close. 3. Summary of Benefits Close -- Summarize all the benefits vs. the costs and asked for the sale. 4. Assumptive Close -- Allows the salesperson (when confident) to verbalize the assumption to see if it's correct. 5. Special Concession Close (Impending Event) -- Offers the buyer an extra incentive for acting immediately. 6. Multiple Options Close (Alternative Choice) -- Gives the buyer multiple viable options 7. Balance Sheet Close -- 2 Column List: "Reasons for Buying" and "Remaining Questions" Helps find out what's holding the prospect back. List pros & cons of buying. 8. Management Close -- Bring in your upper management to assist in negotiations and close. 9. Minor Point Close -- Focuses the buyer on a small element of the decision. 10. Trial Order Close -- This technique involves asking the prospect for a trial order with no obligation (risk). You either guarantee the money back, or provide the product free for a set amount of time. 11. Cost of Ownership Close -- Rather than talking about price - this technique focuses on the long term total cost of ownership. Competing systems may seem cheaper, but when you take into account installation, maintenance, warranty and training over the lifetime of the product -- this system is about half the price. If you buy a competing product, you are more than likely to replace it in two years. Our product will last you twice as long. 12. Combination Close -- Using two or more closing methods.
4 types of objections
1. The Stall or Put-Off -- prospect is simply trying to avoid making a decision, you may not have presented a compelling reason to buy, handling the stall is a test of your attitude. 2. The Searcher -- Often prospects just want more data. They have mentally decided they want to buy. They just want to be convinced. So convince them. 3. The Hidden Objection -- Prospect will not reveal the real reason. Often quite personal, so prospect feels uneasy. Like the iceburg lurking below the surface. 4. The Stopper -- An objection for which no solution can be found. Not every prospect is a fit for what you have to offer. The prospect has a legitimate reason for not buying... so move on.
Content of the notice of breach of warranty
1. The content "need merely be sufficient to let the S know that the transaction is still troublesome and must be watched" 2. Notification need only be such as to inform the S a breach is involved and open the way to normal settlement through negotiation (§ 2-607 cmt. 4) 3. No need for a clear statement of all the objections 4. No need for a claim for damages or of threatened litigation
Impossibility
1. This is relatively rare and usually only used when the goods are very unique, one of a kind, or particular a. Examples: particular painting, particular car, etc. 2. Applies when: a. The K requires for its performance certain goods that are identified when the K is made; b. The goods suffer casualty; c. W/out fault; AND d. Before risk of loss passes to the B. 3. If impossibility does apply, what happens next depends on whether the loss is total or partial a. If a total loss - the K is avoided b. If a partial loss or the goods no longer meet the K reqs - B may demand inspection and may either: i. Treat the K as avoided, OR ii. Go ahead with the deal, but with "due allowance" from the K price
Disclaiming Implied Warranty of merchantibility
1. Under § 2-316(2) where a disclaimer a. May be written or oral; b. Must mention merchantability; and c. If in writing, it must be conspicuous 2. Under § 2-316(3)(a) a. Use of expressions like "as is," "with all faults," or other language that calls the B's attention to the exclusion and makes plain no implied warranties b. Statute does not require conspicuousness; however, many cts nevertheless require it 3. Under § 2-316(3)(b) a. Does not disclaim an IWM, but keeps it from arising in the first place b. By B's examination or refusal to examine i. No implied warranty arises w/ respect to defects that an investigation ought in the circumstances to have revealed c. Professional v. non-professional Bs i. A professional B examining a product in his field will be held to have assumed the risk as to all defects which a professional in the field ought to observe. ii. A nonprofessional B will be held to have assumed the risk only for such defects as a layperson might be expected to observe. § 2-316 cmt. 8. iii. The particular B's skill is also relevant. d. Look for a demand by the S that the B inspect the goods - it is not just about the goods being available. 4. Under § 2-316(3)(c) a. By course of dealing, course of performance, or usage of trade
Dislclaiming Implied Warranty of Fitness for a Particular Purpose
1. Under § 2-316(2) where a disclaimer must a. Be in writing b. Be conspicuous c. Have sufficient language i. Example: "There are no warranties which extend beyond the description on the face hereof." 2. Under § 2-316(3)(a) a. Use of expressions like "as is," "with all faults," or other language that calls the B's attention to the exclusion and makes plain no implied warranties b. Statute does not require conspicuousness; however, many cts nevertheless require it 3. Under § 2-316(3)(b) a. Does not disclaim an IWM, but keeps it from arising in the first place b. By B's examination or refusal to examine c. No implied warranty arises w/ respect to defects that an investigation ought in the circumstances to have revealed 4. Under § 2-316(3)(c) a. By course of dealing, course of performance, or usage of trade
Self-Introduction Approach
1. Weakest approach by itself 2. Address the prospect by name (pronouncing it correctly) 3. State your name and company 4. Present your business card
Curiosity Approach
1. You should know something about the prospect 2. Ask questions whose answers will reflect favorably on your product/service
How to increase per capita incomes...
1. capital deepening 2. improvements in technological efficiency 3. improvements in human development (education and health) 4. Exports expansion (only manufactured) 5. improvements in institutional equality
for market segmentation to succeed, 5 conditions must exist
1. customers needs for the product must be heterogenous 2. segments must be identifiable and visible 3. marketers must be able to compare the different market segments with respects to estimated sales potential, costs, and profits. 4. At least one segment must have enough profit potential to justify maintaining a marketing mix 5. the company must be able to reach the chosen segment using the mix
bases of segmentation
1. geography 2. demographics 3. psychology 4. benefits sought 5. behavior
Marketing Concept
1. identify consumer needs 2. provide products that satisfy those needs and insure long-term profitability
Trade-related investment measures
1. local content- 2. trade balancing- 3. technology transfer requirement- 4. remittance restriction- 5. local equity requirement- 6. export performance requirement-
Several factors influence company sales potential:
1. market potential places absolute limits on the size of the company's sales potential; firm cannot exceed market potential 2. magnitude if industry wide marketing activating has indirect but definite impact on company's sales potential
perfect competition
1. numerous buyers and seller 2. entry is easy 3. product is homogenous
oligopoly
1. numerous buyers, few sellers 2. entry difficult 3. product is differentiated
monopoly
1. numerous buyers, only one or two sellers 2. entry very difficult 3. product highly differentiated
facilitating functions
1. simplifies buying and selling 2. facilitates assembly 3. sales by sample and description 4. makes mass selling possible
By determining the desired benefits, marketers can divide people into groups
1. the benefits sought must be identifiable, using these benefits, 2. markers must be able to divide people into recognizable segments 3. one or more of the resulting segments must be accessible to the firms marketing efforts
trade & capital costs related to offshoring
1. the cost of building a new factory 2. increase in cost for transportation and communication (distance cost) 3. cost from tariffs (if exist)
S's Monetary Damages Possibilities
1.Action for the price under § 2-709 2.Resell the goods and get damages under § 2-706 3.Recover K-market difference damages under § 2-708(1) 4.Lost profits (available in certain circumstances) under § 2-708(2) 5.Liquidated damages under § 2-718 6.Incidental damages (never consequential damages
Lost Profits
1.Availability of this remedy: a.Available when K-market damages and/or K-resale damages are inadequate to put the S in as good a position as performance would have done b.3 instances when these damages will be inadequate: i.B breaches and the S is a lost-volume S. ii.B breaches before S completes production of the goods and S reasonably decides not to complete production (§ 2-704(2)) iii.B breaches and S is a middleman—never actually has the goods, but helps Ss find Bs (a.k.a. a "jobber").
S's remedies arise when B breaches
1.B wrongfully rejects goods, 2.B wrongfully revokes acceptance of goods, 3.B fails to make a payment when due, or 4.B repudiates the K (§ 2-703)
Types of customers
1.Consumers 2.producers 3. reller 4. gov 5. institution
K-Market Damages
1.Formula: KP - MP + ID - ES 2.MP is determined at the time and place for tender a.If a shipment K, MP determined at S's place b.If a destination K, MP determined at time and place of tender
Anticipatory Repudiation
1.If either of the parties repudiates the K "w/ respect to performance not yet due the loss of which will substantially impair the value of the K" to the other party then this aggrieved party may among other things: a.Wait for the other party to perform for a commercially reasonable time b.Resort to any remedy for breach, c.Suspend its own performance. 2.If S is the aggrieved party, it can proceed to identify goods for resale.
S's Remedy Options are indexed in § 2-703 and S can pursue more than 1 remedy to fulfill the fundamental goal of expectancy:
1.S may be able to "withhold delivery" of goods (§ 2-703(a)) 2.S may be able to stop delivery of the goods (§ 2-703(b)) 3.S may be able to resell the goods and recover damages (§ 2-703(d)) 4.S may be able to recover damages for non-acceptance (§ 2-703(e)) 5.S may be able to terminate the K (§ 2-703(f))
Action for the Price
1.When S tries to get B to pay all $ due under the K 2.Favored by Ss above all other monetary damages/remedies b/c it is essentially the S's version of specific performance
value props to manufacts
1.price 2. customize
Persistence
10% sales people left after 4 calls 48% of salespersons quit after 1 contact. 73% of salespersons quit after 2 contacts. 85% of salespersons quit after 3 contacts. 90% of salespersons quit after 4 contacts. Those 10% who go on past the 4th contact -- end up with 80% of the business. Know the numbers -- "300" hitter is a superstar -- failing 70% of the time.
Causes of customer attrition
12 to 15% -- Product Dissatisfaction 10 to 15% -- Price 50 to 70% -- Poor Service
good test slides
14 and 15 -insupplier -out-supplier
Commercial Impracticability
2. To establish excuse for delayed delivery or non-delivery, S must show: a. Performance has been made impracticable by either: i. Good faith compliance w/ government regulation or order, OR ii. The "occurrence of a contingency the non-occurrence of which was a basic assumption on which the contract was made" a) First, identify the contingency (i.e., the change that has made performance impracticable b) Second, ask whether the parties assumed, when they made their K, that the change would not occur. b. AND the S did not "assume a greater obligation" (i.e., the S did not assume the risk of the change) either expressly or implicitly
WBG: Poverty alleviation
2nd phase: eradicating absolute poverty through rural and urban development "redistribution with growth" -bank lending with increased importance in rural development of edu, health, agriculture ** increase productivity of rural poor *** ignored poorest of the poor
Leary circumflex
<-- Opposing and cooperating on the sides
Assets
=liability + owners equity
Revocation of Acceptance
3. May revoke if non-conformity "substantially impairs" the value of the goods to the B, and at least 1 of the following 3 is true: a.B accepted the reasonable assumption S would cure (and S hasn't) b.B accepted w/out discovery of the non-conformity, but non-conformity was difficult to discover before acceptance c.B accepted w/out discovery of non-conformity, but acceptance was induced by the S's assurances. (§ 2-608(1))
evolution of selling slide 2-4
30s prduction 30-60 sales 60-90marketing 90 on partnerships
WBG: Structural adjustment lending
3rd Phase: -assist governments with policy and institutional reform Controversial-
Conditionality
3rd phase of WBG- CONTROVERSY- The concept whereby loans are made to developing countries World Bank provided recipients agree to enact certain economic policies or extend certain trading advantages that benefit lending countries.
time, possession, place, form
4 benefits (also called utility) that marketers work to create
product, price, promotion, place
4 ps of marketing
social, economic, technological, competitive, regulatory
5 areas of environmental scanning
advertising, personal selling, public relations, sales promotions, direct marketing.
5 elements of the promotional mix (know these all)
problem recognition, informtion search, alternative evaluation, purchase decision, and postpurchase behavior
5 steps of consumer purchase decision process (memorize the steps)
filling low inventory goods only
6. evolution of proposals and selection of supplier 7. place and receiver order 8. evolution of product performance
80/20 rule
80 Percent of time spent calling on most productive (potential) customers. 20 Percent on prospects and smaller accounts.
costs of stress
80% of all modern diseases have their origins in stress. In the UK, 40 million working days per year are lost directly from stress -- related illness. Costs in absenteeism to British industry is estimated at 1.5 billion pounds per year. USA is 2.5 times larger = cost of $6.2 billion.
Status
A Rolex watch, a Lexus car, and even the latest Apple iPhone are all examples of a _____ symbol.
Extreme value theory
A branch of statistics that focuses primarily on extreme outcomes
What is "Out of the Money" OTM
A call option with a strike price that is higher than the market price of underlying asset. or Put option with a strike price that is lower than the market price of the underlying asset. Has no intrinsic value, only possesses extrinsic or time value.
Excuse from performance - Commercial Impractibility
A change in circumstances occurred rendering performance impracticable. Parties assumed the contract was contingent on the change not occurring (1) Performance made performance impracticable (2) Without fault of the party seeking excuse (3) Party seeking excuse did not assume greater responsibility (4) Notification of the (a) substantial impairment and (b) desire to terminate or modify the agreement was made seasonably NOTE - Was the change reasonably foreseeable? If only part of the goods were affected, Seller may allocate remainder in a fair and reasonable manner Common Law - Frustration of Purpose
Portfolio
A collection of strategically aligned, value-generating change initiatives that help achieve organizational goals.
Interest Capitalization
A company constructing a long-term operating asset such as a new manufacturing facility may need to finance the costs of construction. When financing by issuing debt, the company must determine whether to add interest costs to the cost of the asset (that is, to capitalize) or to expense the interest costs as incurred. In other words, accountants must determine if interest is a cost of a constructed plant asset or if it is a financing cost. To properly value the cost of a constructed plant asset, firms capitalize material interest charges incurred in the construction of certain assets. The amount of interest capitalized is the lesser of actual interest incurred and avoidable interest. Avoidable interest is the interest the firm could have avoided if it had not borrowed funds to construct the plant asset. 4 Major Considerations in the application of interest capitalization requirements: 1. Assets that qualify for interest capitalization 2. Expenditures on which the firm should compute interest 3. Rate of interest 4. Period of capitalization Because capitalized interest increases an asset's cost, depreciation expense on the asset will be higher in the future. However, interest expense is lower in the construction period.
Overview of Initial Measurement
A company determines the amount to capitalize as PPE as the costs that are reasonable and necessary to bring the asset to the location and condition required for its intended use. Consequently, costs such as installation, delivery, special wiring, interest from the financing of constructed assets, closing costs, and sales tax are included in the initial measurement of PPE. All fixed assets are not capitalized. In practice, firms develop a capitalization policy for PPE, which typically sets guidelines based on the type and/or the magnitude of the cost of the asset acquired. A materiality threshold for capitalization specifies that the firm immediately expense an asset that falls below a predetermined fixed dollar limit (e.g. $1000) rather than capitalize it as an asset. Ex. Ford Motor Company's 2012 annual report noted that it capitalized new assets it expected to use for more than one year with acquisition costs greater than $2500. Firms typically have several subcategories of PPE.
Depreciation of Tangible Fixed Assets
A company's allocation of the initial cost of the asset to future periods of expected benefit from use of the asset is a critically important aspect of accounting for PPE.
objection
A concern or question raised by the Prospect
Accounts Receivable
A current asset account showing amounts payable to a company by customers who have made purchases of goods and services on credit
Business plan
A detailed plan for operating a new business, including description of the business, a marketing plan, a description of the management structure, and financial projections.
Program
A dossier of Projects & transformation activities to achieve outcomes and realise benefits of strategic importance to the business
Cash Drawer
A drawer near the base of the cash register; provides for an organized system of receiving and dispensing money.
Pricing Strategies (Market plan)
A firm may base its pricing strategy on costs, demand, price of competing products.
Application form
A form provided by the employer, to be completed by the job applicant.
Project Request Form
A form that is submitted to request funding from the portfolio for a new initiative.
export
A good or service produced in the home country and sold in another country.
Capital allocation line
A graph line that describes the combinations of expected return and standard deviation of return available to an investor from combining the optimal portfolio of risky assets with the risk free asset
Security market line
A graphical representation of CAPM with beta, reflection systematic risk, on the x axis and expected return on the y axis
loyalty programme
A loyalty scheme is a customer management programme that offers delayed or immediate incremental rewards to customers for their cumulative patronage.
Cash Register
A machine that sales people use to record sales, receive money, and make change.
Core-satellite approach
A majority of the portfolio is invested on a passive or low active risk basis while the minority of the assets is managed aggressively in smaller "satellite" portfolios
Benefit
A measurable improvement resulting from an outcome that is perceived as an advantage by the users and the sponsoring organisation and which contributes towards one or more organizational objective(s)
Relationship Era=Consumer Orientation
A mgmnt philosophy that emphasizes satisfying customers' needs and wants. "Marketing plays a more central role" TQM
uniform commericial code
A number of uniform acts that have been set with the goal of harmonizing the law of sales and other commercial transactions across the U.S.
Discount
A percentage subtracted from the total price of the items purchased
Change bluffer
A person who claims that a salesperson did not return enough money when making change.
Amateur shoplifter
A person who has a strong desire to steal, not for profit but for personal use.
Security characteristic line
A plot of the excess return of the security on the excess return of the market
Portfolio triple constraints
A portfolio's effectiveness to deliver value is controlled by three important elements, namely, organizational goals, projects and resources.
Internal rate of return (IRR)
A profitability metric used by businesses to determine which projects are likely to yield the greatest return per dollar of capital investment. Though it is closely related to the net present value, it reflects anticipated gains as a percentage of the initial investment rather than as a net dollar amount.
Portfolio planning
A program developed in advance of constructing a portfolio that is expected to satisfy the client's investment objectives
straight rebuy
A purchase decision resulting from an ongoing purchasing relationship with a supplier.
modified rebuy
A purchase decision that occurs when a buyer has experience in purchasing a product in the past but is interested in acquiring additional information regarding alternative products or services.
new task
A purchase decision that occurs when a buyer is purchasing a product or service for the first time.
Market model
A regression equation that specifies a linear relationship between the return on a security (or portfolio) and the return on a broad market index
Cash-send
A sale in which an item is purchased for cash and the customer wants it to be delivered.
Dramatization
A sales demonstration that uses showmanship
Nonprobability sampling
A sample in which personal judgment is used to select respondents
Nonprobability Sampling
A sample in which personal judgment is used to select respondents (example: surveying random individuals at your favorite restaurant)
Gamma
A second-order risk, reflects the risk of changes in delta
Counterfeiting
Creating a fake or alter document or current sea and passing it off as genuine
Stress testings
A specific type of scenario analysis that estimates losses in rare and extremely unfavorable combinations of events or scenarios
Portfolio Managent Office (PMO)
A structural unit which is established centrally to manage the investment process, strategic alignment, prioritisation and selection, progress tracking and monitoring, optimisation and benefits achieved by an organisation's change initiatives on behalf of its senior management.
tariff
A tax on imported goods
Project
A temporary endeavour to create a unique product, service, or result according to an agreed Business Case
Penalty
A term that fixes unreasonably large damages is void a.If trying to avoid the liquidated damages provision, argue that it is punitive and truly a penalty b.If trying to enforce, argue it is reasonable and parties are free to set their own terms
Cash Tray
A tray in the cash drawer with compartments for bills and coins.
Examples of negative customer retention strategies
Create exit barriers Enforce the contract Extract switching penalties
Competitive shopping trip
A visit to a competitors store, to study that stores pricing and merchandising practices
Demonstration
A well planned demonstration will: ---catch and peak the buyer's interest, fortify your points and get buyer involved, help the prospect understand the benefits, keep you interested and stimulated, cut down on the number of objections, help you close the sale. 3 Principles in Using a Demonstration : 1. Concentrate the prospects attention to you 2. Follow the "tell them 3 times rule" 3.Get your prospect into the act
Notice of breach of warranty
A. B must give notice of breach of (any) warranty "within a reasonable time after [the B] discovers or should have discovered" the breach (§ 2-607(3)(a)) B. Consequence of failure to give notice: barred from any remedy 1.Accordingly, notice is an affirmative part of a B's case
Express Warranty
A. Need not be a merchant Arises when: 1.S makes an affirmation of fact or promise relating to the goods to the B 2.S provides a description of the goods, or 3.Samples or models are exhibited 4. When the affirmation of fact, promise, description, sample or model is made a part of the "basis of the bargain," an express warranty is created.
Spirit of the Remedies
A. Purpose of all UCC remedies (whether for S or B): 1.Remedies should be liberally administered to put the aggrieved party in as a good a position as if the other party had fully performed 2.Should be liberally administered to satisfy non-breaching party's expectation interest B. Consequential damages not awarded (unless a provision of the UCC or other rule of law provides for them) 1.Ss never get them, Bs can sometimes C.Incidental damages can be awarded to B and S
Closing a sale of goods
A. S delivers the goods and now B has 2 main options after a reasonable time to inspect the goods: 1. Accept goods 2. Reject goods
Breach of Warranty Elements
A. Warranty arose B. Warranty was breached C. Breach of warranty was proximate cause of harm D. Damages E. B gave proper notice to S F. B must overcome any privity issues or defenses
Open-end mutual funds
Accepts new investment money and issues additional shares at a value equal to NAV at the time of investment
IFRS Interest Capitalization
Accounting for interest capitalization under IFRS is similar to US GAAP for all areas discussed: 1. Assets that qualify for interest capitalization 2. Expenditures on which firms should compute interest 3. Rate of interest 4. Period of capitalization
Subsequent Measurement of Property, Plant and Equipment
Accounting for long-term operating assets extends beyond acquisition. New machinery must be maintained, depreciated over time, or impaired if its value falls. Several events and transactions affect long-term fixed assets after acquisition, including subsequent expenditures related to the fixed assets, depreciation, and impairments. Impairments (Chp.12) , are decreases in an asset's carrying value whenever the asset no longer provides the future benefits expected.
Money weighted return (internal rate of return)
Accounts for money invested and provides the investor with information on the return earned on the actua linvestment
Risk shifting
Actions that change the distribution of risk outcomes
SOF Exceptions
Admission exception The "merchants should read their mail" exception (note: only excuses the "signed by the party against whom enforcement is sought" requirement) Specially manufactured goods exception Part performance exception Possible non-statutory exceptions
S's remedies on discovery of B insolvency after delivery of goods
After delivery of goods: a.S can reclaim goods bought on credit if: i. B was insolvent when goods were received; AND ii. If S makes demand w/in ten days of receipt (§ 2-702(2)) b.S may also have a security interest in goods for which payment was due on delivery, but not paid for (example: B receives goods and pays w/ a check that bounces).
Forward commitments
Agreements that obligate two parties to undertake a transaction at a future date at a price or rate agreed on when the commitment is made
The two-fund separation theorem
All investors regardless of taste, risk preferences and initial wealth will hold a combination of two portfolios or funds: a risk free asset and an optimal portfolio of risky assets
Goods (defined)
All things (including specially manufactured goods) which are movable at the time of identification to the contract (other than money) for which the contract price is to be paid
Overview of the Depreciation Process for Property, Plant, and Equipment
Allocating the cost of a fixed asset through depreciation requires that management estimate the asset's useful life and its scrap value, and choose the depreciation method.
open non customers
Ambivalent non-customers are as attracted to the alternative as they are to their current brand
conspiracy
An agreement between competitors before customers are contacted
trade deficit
An excess of imports over exports
Goodwill
An intangible asset that is obtained through acquiring another entry that provides a competitive advantage, in the market place such as a brand recognition, quality reputation, high employee morale, etc.
Separately managed accounts
An investment portfolio managed exclusively for the benefit of an individual or institution
Objections
An objection is anything the prospect says or does that presents an obstacle to the smooth completion of the sale. Learn to accept objections as a challenge, which when handled correctly will benefit you and your prospect. If you fear objections you will fumble your response, often causing you to fail.
Part Performance Exception
An oral contract can be enforced with respect to goods for which payment has been made and accepted or with respect to goods which have been received and accepted.
Admissions Exception
An oral contract can be enforced without a writing if the party against whom enforcement is sought admits in pleading, testimony, or otherwise in court that a contract was made. Only enforceable up to the quantity admitted.
Portfolio Sponsoring Organisation (PSO)
An organisational unit with the budget, projects, resources, and the decision-making authority on how it wants to allocate its resources.
Change Initiative
An umbrella term for Projects and Programs
Risk
An uncertainty (threat or opportunity) that will affect costs, time, benefit, quality and/or scope objectives of a project.
Security analysis
Analysts assess the expected level and risk of cash flows each security will provide
Fundamental factor models
Analyze and use relationships between security returns and the company's underlying fundamentals
Situational Analysis Market plan
Analyze the marketing environment Conduct SWOT analysis
Credit card
Another name for a charge card
Charge return
Another name for a charge credit
family, social surroundings, price, lifestyle
Any 5 influences that affect consumer behavior (there are many!)
Entrustment
Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him the power to transfer all rights of the entruster to a B in ordinary course of business."
Liquidated Damages
Arises when the parties specify or agree to, in the K (can be oral or written) to a specific amount of damages in the event of either party's breach
Implied Warranty for a Particular Purpose
Arises when: a. S has reason to know B's particular purpose for which the goods are required; b. S has reason to know B is relying on S's skill or judgment to select or furnish suitable goods; AND c. B does rely. Content of warranty: goods will be fit for that particular purpose
Tabulation
Arranging data in a table or other summary form to get a broad picture of overall response
Expenditures
As construction occurs, a company records its expenditures in a noncurrent asset account (construction in progress) and computes interest on the weighted average accumulated expenditures for the accounting period in which it is calculating interest capitalization.
Drift
As the portfolio is constructed and its value changes with the returns of the asset classes and securities in which it is invested, the weights of the asset classes deviate from the SAA
closing
Asking for the Prospects commitment
activities ranked by high-skilled/low-skilled labor
Assembly, Component Production, Marketing & Sales, R&D
Intangible Assets
Assets that do not have a physical existence that provide a business entity competitive advantage such as copyrights, patents, trademarks, etc.
ASEAN
Association of Southeast Asian Nations - 12 member nations of Southeast Asia to promote economic growth, free trade and economic collaboration between member nations
Homogeneity of expectations
Assumption that all investors have the same economic expectations (expectations of prices, cash flows and other investment characteristics)
Risk averse
Assumption that an investor will choose the least risky alternative
Warranty
Assurance by the seller that the products will perform as represented
warranty
Assurance by the seller that the products will perform as represented
Skewness
Asymmetry of the return distribution
Additional terms in the acceptance - Battle of the Forms
At common law - Mirror image rule UCC Art 2 displaces the mirror image rule Four situations additional or different terms are incorporated into the contract: 1. Definite and seasonable acceptance (expression or in writing). If "conditional" then no formation. 2. Informal agreement, followed by a written confirmation with CONTRADICTORY terms - Knockout Rule - knockout conflicting terms and use a gap filler. 3. Informal agreement, followed by written confirmation with additional NON-CONTRADICTORY terms - NON-MERCHANTS - Generally considered proposals for modification - MERCHANTS - terms become part of the contract unless (a) express limitation; (b) material alteration 4. No contract formed by offer and acceptance, but parties performance indicates a contract. UCC gap fillers may supplement
Equity market neutral
Attempt to eliminate overall market movement by going short overvalued securities and going long an equal value of undervalued securities
Fixed-income arbitrage
Attempt to profit from arbitrage opportunities in interest rate securities
Event driven
Attempt to take advantage of specific company events
Benefit to cost ration (BCR)
Attempts to identify the relationship between the cost and benefits of a proposed project.
Installment Contract
B can reject ONLY if: a) Non-conformity substantially impairs the value of the goods or that particular installment and it cannot be cured (§ 2-612(2)) b) B must accept only if S gives adequate assurance that it will cure the non-conformity.
Single Delivery Contract
B may properly reject if: a) The goods are non-conforming or tender is non-conforming (Perfect Tender Rule) b) But note, this might be softened by trade usage, etc.
B's rights & duties after revocation
B who revokes has the same rights and duties w/ regard to the goods as if he had rejected them (§ 2-608(3))
Cash
Banknotes and coins in hand or readily available; money or ready money immediate payment for goods or services
statutory law
Based on legislation passed either by state legislatures or by Congress
Why Objections Occur
Because there are doubts or unanswered questions in the mind of the prospect. Because the prospect wants to buy or is interested in buying, but needs clarification, wants a better deal, or must have a third party approval. Because the prospect does not want to buy.
Top-down analysis
Begins with consideration of macroeconomic conditions then addresses selection of the most attractive investments within those segments
Courtesy
Being considerate of the rights and ideas of others and sincerely interested in what people are doing and saying Credit card
Enthusiasm
Being excited about one's job in the products and services provided to customers
Dependability
Being on time, always going to work unless an absence is unavoidable, and always completing the tasks assigned
Mutual trust
Belief by one party that the other party will fulfill its obligations in a relationship --Dependability --Competence --Customer orientation --honesty --likability
FDI (costs and benifits)
Benefits -increased competition= lower prices and increased quantities -creating jobs -new skills -transfer of technology -improve imports and exports in BOP -new progressive business culture Costs -foreign firm could have too much market power -could worsen imports in BOP -increase in pollution -negative dominance of western culture
Magnuson-Moss Warranty Act
Benefits - (1) Warranty regulation \ Transparency, (2) Attorneys' Fees, (3) Easier to overcome privity, (4) State and Federal Jurisdiction Must be "consumer product" normally used for personal, family or household goods Provides Cause of Action for damages and attorneys' fees State Court or Federal Court if (1) $50k or (2) Class action with 100+ claimants each at least $25 If Seller offers a warranty - (1) Must indicate full or limited warranty, (2) Must include certain required terms, (3) Warrany made available before purchase
Merchant's Exception
Both parties must be merchants; Writing must be "sufficient against the sender" (it has to meet all the requirements of a sufficient writing except that it is signed by the sender, not the recipient); Writing must be received within a "reasonable time" of the making of the K; Recipient knows or has reason to know the writing's contents; and Doesn't object in writing within10 days. If ALL the above are satisfied, then the writing is enforceable against the recipient even though the recipient never signed it
Sell-side firm
Broker/dealer that sells securities to and provides independent investment research/recommendations to investment management companies
Customer oriented businesses
Businesses that attempt to satisfy the needs and wants of their customers
FOB factory
Buyer assumes responsibility for any loss or damage incurred during transportation
Rejection
Buyer may reject for non-conformity. If installment contract, non-conformity must substantially impair the value Buyer must reject within a reasonable amount of time & seasonably notify seller After rejection, buyer can't use goods but must hold for reasonable time for seller to remove. Buyer can't use the goods Seller has unfettered right to cure (must give seasonable notice of intent to cure)
Revocation of Acceptance
Buyer may revoke if non-conformity substantially impairs the value and at least one of the following: 1. Buyer reasonably assumed seller would cure; 2. Non-conformity was difficult to discover before acceptance 3. Acceptance was induced by seller's assurances
Breach of Warranty
Buyer\Plaintiff must prove: 1. Warranty arose; 2. Warrany was breached; 3. Breach was proximate cause of harm 4. Damages 5. Buyer notified seller 6. Privity: Alt A - Warranty extends to persons in buyers family, household, or guest in buyer's home - Reasonably expected to use the goods Alt B - Warranty extends to any natural person reasonably expected to use the goods
Long/short
Buying long equities that are expected to increase and selling short equities that are expected to decrease (profit from market movements)
Convertible arbitrage
Buying securities that can be converted into shares at a fixed price and simultaneously selling the stock short
Straight rebuys:
Buying the same product from the source it was bought previously
Buyout fund
Buys all shares of a public company to make it private and restructure the operations
customer porfolio management
CPM aims to optimize business performance - whether that means sales growth, enhanced customer profitability or something else - across the entire customer base.
Ambition
Desire to improve oneself, to become a better sales person.
campaign management
Campaign managers design, execute and measure marketing campaigns with the support of CRM technologies. Sometimes these are multimedia campaigns across direct mail, email, fax, outbound telephony and SMS platforms
Closing Differences between 2 & 2A
Can only accept leases by affirmatively signifying acceptance after reasonable time to inspect Must be a true lease and must meet financial lease elements
Dislclaiming Warranty of Title
Can only be modified or excluded by specific language or by circumstances which give B reason to know that S does not claim title in himself or that he is purporting to sell only such right or title as he or a 3rd person may have b."As is" language will not work to disclaim c. Doesn't require a writing, but it should be d. Should use bold letters in disclaimer e. The more clear, the better → need to ensure that the B knows it and cannot later turn around and say "I didn't know"
Cancelling an Installment Contract
Can only occur when the non-conformity substantially impairs the value of the whole K
-OLI Framework- Ownership Advantage
Capital that can be replicated in different countries without losing value or high transaction costs "knowledge capital"- managers, patents, technology, brand, reputation
Amount keys
Cash register keys to record the purchase price of products or services.
PS: Interpretation of (Theta) for an industry with an NTR gap of 1 percent
Change in employment for an industry affected by PNTR relative to change in employment with 0 NTR gap
Idea behind how PS estimates the effect of the PNTR on manufacturing employment (NTR Gap)
Change in employment in industries with a high NTR gap and subtract that off with a change in employment in industries with a low NTR gap
Portfolio entry criteria
Characteristics a newly proposed project needs to fulfil in order to be considered for further evaluation.
CORE
Choice, organisation, results and evaluation (the choice of introducing sales to the company, where is sales place in the company, are the objectives and strategic goals clear, evaluate choice and make adjustments)
Marketing Metrics
Click-through rates, conversion rates, and cost per order are all examples of _____ that help marketers to watch the performance of their marketing campaigns, initiatives, and channels and when appropriate serve as a control mechanism
Risk attitude
Client's willingness to take risk
Balanced score card
Clients, internal business processes, learning capacity ---> financial results
Choice close
Closing technique in which the sales person offers the customer a choice between two items
Ask your customer to buy and close
Closing technique in which the salesperson asks the customer to buy.
Assume they are buying to close
Closing technique that involves a leading statement to get a commitment from the customer.
Advantage and disadvantage close
Closing technique used to summarize or reveiw for customers the reasons for making the purchase.
Buying Signals
Clues that a customer is ready to buy.
organizational buying and selling
Complexity of the organizational buying process ---Purchasing agents make purchase decisions ---Buying decisions involve extensive evaluations and negotiations ---Complexity is increasing as more customers become global businesses
commitment to mutual gain
Creates a win-win relationship •One does not take advantage of the other •Mutual investment
distinctive
Coca-Cola is superior to its competitors in its distribution of products. This is an example of _____ competency.
cognitive advertising
Cognitive advertising objectives include: raising awareness, developing understanding and generating knowledge. New customers generally need to be made aware of the product and to understand what benefits it can deliver
HM: Interpret Theta College (In terms of wage growth)
College graduates in industries that lost all protection due to NAFTA and college graduates in industries unaffected by NAFTA had the same wage growth from 1990-2000
Customer Lifetime Value
Combinded total of all future sales --frequency of purchase --revenue size
Mutual funds
Commingled investment pool in which investors in the fund each have a pro-rata claim on the income and value of the fund
Frustration of Purpose
Common Law 1. An excuse for a party's non-performance b/c of some unforeseeable and uncontrollable circumstance 2. Very fundamental purpose of K is rendered irrelevant - the K ceases to make sense by occurrence of which was a basic assumption of K
Follow Through
Common Post-Sale Services: -- Make credit arrangements. Schedule Deliveries. Be present during delivery. Monitor Installation. Offer training on use or care. Make good on your promises.
Value Proposition
Communicate with marketing promotional activities, value customer will realize Whole bundle the firm promises to deliver.
ADH Slides state that locations that are considered most vulnerable to Chinese import competition:
Commuting Zones that specialize in industries that saw the largest growth in Chinese imports per workers
collusion
Competitors working together while the customer is making a purchase decision
Empathy
Concern for the interest and feelings of other people
Customer objections
Concern or hesitation by customers when considering the purchase of products or services
Consideration
Concerned for the feelings and rights of other people
Units of conviction
Concise, carefully prepared "mini-presentations" that are used as building blocks in constructing the information the salesperson presents. -- Prepare units of conviction ahead of time, practice them until they are comfortable, they become a permanent part of your selling arsenal, learn how to personalize units of conviction. Each Unit of Conviction Contains: Feature (A fact about the product or service), Transitional Phrase or Bridge Statement, Benefit (What's in it for me?), Evidence or proof statements, Tie-down (Trial Close)
LM: Type of congressman more responsive to TAA generosity
Congressmen whose CD is more vulnerable to trade and an FTA partner that is facing a greater reelection risk
How to keep an offer open
Consideration or Firm Offer
Portfolio Executive Board (PEB)
Consists of Senior Management with decision making authority: Builds and maintains the Strategic Framework. Governance body taking decisions on inclusion of initiatives in portfolio.
Bond mutual funds
Consists of individual bonds and occasionally preferred shares
Collaborative Consumption
Consumers increasingly would rather rent than purchase the products they use * Traditional marketers looking for this trend
How to see if a contract was formed
Contract formed under 2-206? P.O. followed up by a means of acceptance reasonable in the circumstances (perhaps shipment of goods). If so, the PO is probably the offer and it was probably accepted. The PO's terms are probably the governing terms. 2. Contract formed orally or by informal correspondence followed up by one or more written confirmations. You have a deal (how do I know this?) and just need to figure out the terms. 3. If no to 1 and 2, ask if there is a contract formed by the exchange of forms. Remember the mirror image rule is supplanted, but what do we still need after the offer? ______________________ What language in the "acceptance" prevents formation? ________ If a contract formed by exchange of forms, you still may need to figure out the terms. 4. If "No" to 1-3, then ask if a contract evidenced by conduct. If yes, use 2-207(3) for terms. If no, no K.
Gatekeepers
Control the flow of information and limit the alternatives considered Ensure that purchases are consolidated under one contract Reduce costs and increase quality
Two main strategies for customer development
Cross-selling is selling additional products and services to an existing customer. Up-selling is selling higher priced or higher margin products and services to an existing customer.
Notes Receivable
Currency owed to a business entity from its customers that are acknowledged with a signed written contract..
Prepaid Assets (or Expenses)
Currency paid in advance by a business entity for a service such as property insurance or a building lease. BS.
Customer delight
Customer delight = P > E where P = Perception E = Expectation
simple customer retention
Customer retention is the number of customers doing business with a firm at the end of a financial year expressed as percentage of those who were active customers at the beginning of the year.
portfolio purchasing
Customers buy on a portfolio basis when they buy from a choice set of several more or less equivalent alternatives.
customer value
Customers perception of what they obtain in exchange for what they have to give up
Sales order processing
Customers place orders with a customer service representative.
Cash Refund
Customers receive the money originally paid for the item.
Decided customers
Customers who know what they want to buy
Demand
Customers' desires for products coupled with the resources needed to obtain them
Regulatory risk, accounting risk, tax risk (Compliance risk)
Deal with the matter of conforming to policies, laws, rules and regulations as set forth by governments and authoritative bodies
relationship with customers
Deception: Deliberately presenting inaccurate information •Telling half-truths •Withholding important information •Manipulative and unethical •Bribes: Payments made to buyers to influence their purchase decisions •Kickbacks: Payments made to buyers based on the amount of orders placed
Country levying the tariff, the tariff will
Decrease the consumer surplus and Increase the producer surplus
Portfolio Design Specifications
Defines which change initiatives can be considered as serious contenders for a given portfolio.
buyer personas
Defining your personas is essential to personalizing the sales process for today's empowered buyer
Customer orientation
Degree to which salesperson puts customer needs first •Stressing benefits and solutions to problems over features •Emphasizing the salesperson's availability and desire to provide service
How do customers reduce perceived risk
Delay purchase Seek word-of-mouth endorsement Negotiate service contracts Seek additional information from advertising copy Buy established brands Build a relationship with a supplier Transact with reputable supplier Seek performance guarantees Buy with credit card (protection if product fails) Negotiate discounts Take out insurance Request pre-purchase trial Read testimonials
deception
Deliberately presenting inaccurate information
Deception:
Deliberately presenting inaccurate information •Telling half-truths -Withholding important information --Manipulative and unethical
Positive customer retention strategies
Delight customers Create customer-perceived added value Create social and structural bonds Create customer engagement
With regard to derivatives, what are the specialized measures of risk?
Delta Gamma Vega Rho
Derivatives Risks
Delta - this is the sensitivity of derivatives values to the price of the underlying asset Gamma - this is the sensitivity of delta to changes in the price of the underlying asset Vega - this is the sensitivity of derivatives values to the volatility of the price of the underlying asset Rho - this is the sensitivity of derivatives values to changes in the risk-free rate
Competence
Demonstrated knowledge/training of: •Customer •Product •Industry •Competition
Depreciation Guidelines
Depreciation Expense is an end-of-period adjustment that firms include on the income statement in the computation of operating income. Firms generally report depreciation expense as part of selling, general, and administrative expenses. On the balance sheet, firms reduce the tangible fixed asset by increasing accumulated depreciation, a contra-asset account that represents the total depreciation taken over the life of the asset. Firms subtract accumulated depreciation from the original cost of the fixed asset and report net book value (NBV), also referred to as net fixed assets (NFA), in the noncurrent asset section of the balance sheet. Initially the most objective information regarding a fixed asset's value is its cost. As a result, the accountant preserves the record of historical cost and records the estimated depreciation in the separate accumulated depreciation account. For financial statement purposes, firms report the net book value as a single line item.
Organizational Buying and Selling
Derived versus direct demand ---Sales to OEMs and resellers are based on derived demand rather than direct demand ----Derived demand:
Main Redistribution effect of a tariff: Transfer of income from
Domestic Buyers to Domestic Producers
Dealing with price concerns
Don't apologize for the price. Do add value with a cluster of satisfactions. Unbundle. Don't make price the focal point of your presentation. Do point out the relationship between price and quality (VALUE) Do explain the difference between price and cost.
Amplification Questions
Double-Check Question -- restate or re-phrase the prospects remarks. Ask prospect to expand on their answer. Tells prospects: 1. That you have been listening 2. That you understand their concerns 3. That what they say is important to you 4. Checks for mutual understanding 5. Invites the prospect to expand or clarify any point of disagreement 6. Narrows down generalizations and clears ambiguities
event-based marketing
EBM provides companies with opportunities to approach prospects at times which have a higher probability of leading to a sale, e.g. important life-stage events
Probability sampling
Each member of the population has some known chance of being included (example: action films vs. "chick flicks")
Defined Contribution Plan
Employer contributes a certain sum each period to the employee's retirement account. The employer makes no promise regarding the future value of the plan assets; thus, the employee assumes all of the investment risk
Defined benefit pension plans
Employer has an obligation to pay a certain annual amount to its employees when they reitre
Defined Benefit Plan
Employer promises to make period payments to the employee after retirement. Because the employee's future benefit is defined, the employer assumes the investment risk
Key point in risk governance framework
Employing a risk governance committee and a chief risk officer (CRO)
false claims act (lincoln law)
Encourages citizens to press claims against vendors who sell fraudulently to the U.S. government
administrative laws
Established by local, state, or federal regulatory agencies
Customer Payment
FINAL STEP of sales cycle. Posting payments against invoices Reconciling differences, if necessary Process is done in accounts receivable against open items
Personal selling
Face-to-face selling in which a seller attempts to pursuade a buyer to make a purchase
Recognizing nonverbal buying signals
Facial expression changes. Prospect becomes more relaxed (friendly). Prospect nods agreement. Leans toward you. Examines product and/or literature intently.
Kurtosis
Fat tails or higher than normal probabilities of extreme returns
How do B2B customers differ from B2C customers
Fewer in number Bigger in size Closer relationships with suppliers Derived demand Professional buying Direct purchase
Initial Measurement with Deferred Payment Arrangements
Firms can acquire PPE by making an immediate cash payment, financing the acquisition by issuing a note payable, or some combination of the two. The payment method used impacts the amount of PPE the firm records.
Period of Capitalization
Firms capitalize interest from the time of the initial expenditure to the time the asset is ready for its intended use. When construction is completed but the asset is held idle - envision protestors blocking the operating of a nuclear power plant - the firm must charge interest incurred after the completion of construction to expense.
Land Improvements
Firms capitalize land improvements - which include landscaping costs, lighting, fence installations, lawn sprinkler systems, and driveway construction - in a separate land improvements account. A separate account is needed because land improvements are subject to depreciation, whereas land is not.
Computation of Capitalized Interest
Firms compute the amount of avoidable interest as the weighted-average accumulated expenditures times the appropriate interest rate. If the computed avoidable interest exceeds the actual interest for the year, the firm only capitalizes the actual interest incurred. (in other words, it capitalizes the lesser of the actual interest or the avoidable interest) Companies often invest excess borrowed funds, particularly at the beginning of a construction project, in short-term interest-bearing investments that earn interest revenue. Companies report interest revenue separately, rather than netting this interest revenue with their interest costs.
Subsequent Expenditures
Firms either capitalize or expense expenditures made after acquisition of a fixed asset. Again, the decision to capitalize or expense these costs depends on the definition of an asset. Firms expense noncapital expenditures immediately, such as ordinary repairs, which are expenditures to maintain the operating efficiency of an asset that do not extend its original useful life. Many ordinary repairs are relatively small expenditures that recur on a regular basis, such as a periodic oil change for a vehicle. An oil change does not increase the life of an asset beyond the original estimate and it does not enhance its output. If an expenditure provides future economic benefit and therefore, qualifies as an asset (i.e. it is a capital expenditure), the firm capitalizes the costs by adding the cost of the expenditure to the carrying value of the long-term fixed asset. Examples of capital expenditures are major overhauls of existing property, plant and equipment, extraordinary repairs, and plant expansion. Adding an additional floor to a factory building or installing a refrigeration system in a delivery van would qualify as a capital expenditure.
qaulity c
Firms expect their suppliers to support their efforts to provide quality products •Salespeople need to know what organizational buyers are looking for
Property, Plant, and Equipment Measurement
Firms measure PPE by determining the amounts to record as an asset or to expense immediately.
Qualifying Assets
Firms should capitalize interest for assets constructed or otherwise produced for the firm's own use (ex. a self-constructed power plant by a public utility). Qualifying assets include assets constructed by others for the firm's use where deposits and progress payments have been made. The manufacture of inventory or other routine production are not qualifying assets. Firms should also capitalize interest on assets intended for sale or lease that they construct or otherwise produce as discrete projects (for example, office buildings and land purchased for development)
Rate of Interest
Firms use two separate interest rates to determine the amount of interest to capitalize. 1. The interest rate incurred on specific borrowings applies to the portion of the weighted-average accumulated expenditures that is less than or equal to the amount borrowed specifically to finance the construction of the asset. 2. The weighted average interest rate on all other general outstanding debt during the period applies to the amount of the weighted-average accumulated expenditures that is greater than the amount borrowed specifically to finance the construction of the asset.
Marketing
First and Foremost about satisfying Consumer need in a profitable manner.
Approach
First initial contact with prospect (Potential Customer) **Not always face-face contact
Finance Lease
First, it must be a true lease and NOT a disguised sale (remember Economic Realities Test & Four Sure Sales Situations) Second, the remainder of § 2A-103(1)(g) must be satisfied: i.Lessor does not select, manufacture, or supply the goods; a) Purpose: to ensure lessor is just the middle man ii.Lessor acquires the goods or the right to possession and use of the goods in connection w/ the lease; AND iii.One of the following occurs: a) Lessee receives copy of supply K before signing the lease; b) Lessee has K approval over the supply K; c) Lessee receives statement designating warranties, disclaimers, etc., before signing the lease K, provided to the lessor by the supplier; OR d) In a non-consumer lease, lessor informs lessee in writing before signing the lease K the identity of the supplier whom lessee can get all the info about the lease from
Vega
First-order measure of the change in the derivative price for a change in the volatility of the underlying
Guidelines for closing sale
Focus on dominant buying motives. Negotiate tough points before attempting the close. Avoid surprises at close. Display self-confidence at close (believe). Ask for order more than once. Recognize closing clues. Longer selling cycles require multiple commitments.
Strategic relationship
Focused on long-term relationships, complex product, greater risk, high added value
What is risk budgeting?
Focuses on how risk is taken by quantifying and allocating tolerable risk to various activities and/or investments based on their characteristics.
Follow up
Follow-Ups have two major objectives: To express appreciation & to enhance the relationship. AND to determine if customer is satisfied or are they having problems. -Poor service and lack of follow-up are common causes of customer attrition. -Follow Up Methods: Personal Visits, Telephone Calls, E-mail Messages, Letters or Cards, Entertainment, Call Reports, Should encompass all key people (Receptionists, Technical Personnel, Stock/Receiving Clerks, Management Personnel, All Sales Personnel.) Plan For Follow-Up: Stay Informed -- Changes & Problems. Determine Contact Frequency -- Needs of both you and customer considered. Phone Calls -- Verifications, Check for Problems, Information, Inventory. Send Mail (Email, Letter or Card) -- No specific problems - keep in touch - grow the relationship.
Passively managed stock mutual funds
Followed by index funds, goal is to match or track the performance of different indices
Tariff levied on a large country (Home) lowers the world price of imported good. This causes
Foreign suppliers to produce less of the good which was levied a tariff
Cover Damages Buyer not paid any part of purchase formula
Formula: CC - KP + ID + CD - ES
Cover Damages Buyer paid part of purchase price
Formula: RBPP + CC - KP + ID + CD - ES
Lessor
Functionally, like a financer - usually a bank or financial institution Entity that has nothing to do w/ the selection, manufacture, or supply of the leased goods (§ 2A-103(1)(p)) Person who transfers the right to possession and use of goods under a lease
Gap Filling
Gap fillers are used when contracts are ambiguous Gap filling is a last resort Price - Reasonable at the time of delivery Goods are to be delivered at once, not in separate lots Place for delivery is the seller's place of business Time for shipment shall be reasonable NO GAP FILLER FOR QUANTITY
Fact finding
Gather information about the client's circumstances and discuss the client's objectives and requirements
Risk of Loss
Generally, If one party causes the loss, that party bears the loss Default - FOB Seller's Place (Shipment) - Burden shifts when goods leave seller's possession FOB Buyer - Burden shifts when goods are delivered to buyer If goods are held by Bailee - Risk shifts to buyer when one of three: 1. Buyer receives title 2. Bailee acknowledges Buyer has right of possession 3. Bailee is given direction to deliver to buyer If contract is otherwise breached, Risk of Loss remains with seller until cure or acceptance If buyer repudiates otherwise valid contract, risk of loss remains with buyer for a commercially reasonable time
Parol Evidence Rule
Generally, Parties to a contract may not introduce evidence extrinsic to a contract as terms of performance 1. Is the extrinsic evidence contradictory or consistent with the terms of the writing? If contradictory, may not be introduced. 2. Assess the writing: (A) Is it a final expression (or does it contemplate further negotiation)?; (B) Is it complete, i.e., does it contain a merger clause indicating that all previously negotiated terms are incorporated therein? If final but not complete, writing is not intended to be exclusive source of terms. Extrinsic evidence CONSISTENT with the writing may be introduced. If final and complete, no extrinsic evidence introduced
Expansion Selling
Get More From Current Customers 1. Full-Line Selling -- Recommending products & services related to the main item sold. 2. Cross-Selling -- Selling products or services not directly related to the previously sold item. 3. Up-Selling -- Effort to sell better quality or newer version of product.
Warranty of Title
Goods are conveyed with good title and its transfer rightful, delivered free from encumbrance Difficult to disclaim Void Title - Buyer unknowingly purchases goods from seller who doesn't own the goods, then buyer has void title and nothing to pass on Voidable title - Goods obtained by fraud or bad check -- If sold, good title transferred to a good faith purchaser for value Entrustment - Goods are entrusted to a merchant -- If sold, good title transferred to a good faith purchaser in the ordinary course of business
Specially Manufactured Goods Exception
Goods are to be specially manufactured for the buyer, Goods are not generally suitable for sale to others in the ordinary course of the seller's business and are not generally suitable for sale to others, and The seller has either made a substantial beginning of the manufacture or a commitment for procurement of the goods Before notice of repudiation by the buyer; and Under circumstances that reasonably indicate the goods are for the buyer.
Markoqitz efficient frontier
Graph of the set of portfolios offering the maximum expected return for their level of risk
Why territory management
Greater sales. Greater customer & salesperson satisfaction. Greater salesperson motivation (ownership). Less turnover Pay for performance Control expenses Plan for staff incentives
common law
Grows out of court decisions
IFRS Component Depreciation
IFRS requires that firms separately depreciate each part or component of a fixed asset that is significant in relation to the asset's total cost. For example, the purchase of a building would involve a number of different components, such as the foundation and frame, heating and air conditioning systems, and other non-weight bearing parts. After the firm identifies the components, the methodology to depreciate is identical to our prior discussion. Although US GAAP allows the components-based approach, it does not require it. Consequently, most firms the report under US GAAP do not separate their depreciable assets into components.
Problem recognition
If a consumer sees a significant difference between his or her current state of affairs and some desired or ideal state, which step of the consumer decision-making process is the consumer in
Sadvertising
If an advertiser places a TV commercial using a lonely, lost puppy to sell its products, then that advertiser is said to be utilizing
subliminal
If an advertiser uses hidden messages in its product commercial, or hides messages in the product itself (such as baking words into the tops of crackers), the advertiser is using _____ advertising.
Is it a complete integration
If parol evidence does not contradict the terms in the writing and is consistent w/ the writing, the evidence will be admitted to explain or supplement the agreement "unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement" (a complete integration, total integration or full integration) as opposed to a mere final integration or partial integration
Economic Realities Test
In a true lease, there is, at the time the lease is entered into, a reasonable possibility that the lessor will eventually get the goods back when there is still meaningful economic value in them. If there isn't a reasonable possibility, then you've got yourself a sale that was just dressed up as a lease.
Load mutual funds
In addition to an annual fee, a percentage fee is charged to invest in the fund and/or for redemptions from the fund
Basket Purchase: Heterogenous Assets
In basket purchases involving heterogenous assets, the firm must properly allocate the total costs to the individual accounts to be reported on the balance sheet (e.g. manufacturing equipment, building, land, and inventory) Ex. A firm pays one price for a piece of land that has four buildings on it. At what amounts does the firm initially record the land and each of the four buildings? The relative fair value method allocates the total purchase cost to the individual assets acquired in a single transaction by assigning the total cost incurred based on the percentage that each asset's fair value bears to the total fair value of the assets purchased.
Cost per impression
In digital marketing, which of the following refers to an online ad purchase in which the cost of the advertisement is charged each time the advertisement shows up on a page that the user views?
Unconscionability
In light of the commercial needs of the case, the terms are so one sided as to be unconscionable under the circumstances - question of law, not fact Procedural Unconscionability - Unfairness in the bargaining (formation) process - Absence of meaningful choice (short of fraud) Substantive Unconscionability - Terms are unreasonably favorable to a party which no sane man would take advantage of If Court finds unconscionability - (1) refuse to enforce contract, (2) Sever the unconscionable term, or (3) Limit the application of the unconscionable term
Examples of sales promotions that build repeat purchase
In pack or on-pack voucher Rebate or cash-back Patronage awards Free premium for continuous purchase Collection schemes Self-liquidating premium
Partial-year Depreciation
In reality, firms purchase PPE throughout the year. Thus, they must use a partial-year depreciation. In practice, firms employ a large variety of methods to compute partial-year depreciation that assume the firm purchased the asset at certain fixed points during the year. Half-Year Convention - the firm records a half year of depreciation for an asset acquired during the year of purchase (the assumption is that the firm acquired the asset at the midpoint of the year). The company also records a half-year's depreciation in the final year of the asset's life. Ex. For an asset purchase on May 1 with a 5-year useful life, the firm take a half year of depreciation in year 1 and year 6 Other approaches assume that the firm acquired the asset at the beginning or the middle of the month it was placed in service. Partial year depreciation using the straight-line method is shown in Ex 11.15
Straight-Line Method (SL)
In recent years, US firms depreciated over 90% of tangible fixed assets using the straight-line method. The SL Method applies a constant rate of depreciation against a constant depreciable cost. The firm determines the rate of depreciation by taking one over the useful life of the asset. Depreciable base (also referred to as depreciable cost) is equal to acquisition cost less estimated scrap value. Depreciation expense is the depreciable base divided by the useful life or the depreciable base multiplied by the straight-line rate. Depreciable Base = Acquisition Cost - Scrap Value Straight-Line Depreciation Expense = Depreciable Base / Useful Life or Straight-line Rate = 1/Useful Life Straight-line Depreciation Expense = Depreciable Base * Straight-Line Rate
Buyer
In the buying center, which role has responsibility to execute the purchase
Market
Includes all risky assets or anything that has value (all assets may not be tradable/investable)
Export Subsidy has the following effects:
Increase Producer Surplus Decrease Consumer Surplus Decrease Government Revenue Decrease Overall Domestic Welfare
Effects of an Import Quota:
Increase in Producer Surplus Decrease in Consumer Surplus No Change in Government Revenue Ambiguous Effects on Overall Domestic Welfare
Trade Creation
Increase in economic welfare from joining a free trade area, such as a customs union. Occurs when there is a reduction in tariff barriers, leading to lower prices, then consumer surplus: shift from high cost domestic to low cost foreign imports
buying signals
Indications, both verbal and non-verbal, that a Prospect is ready to buy
users
Individuals within an organization who will actually use the product being purchased
Selling strat
Information needed for salespeople to develop a sales strategy •Suppliers or brands the customer is considering •Product characteristics being used in the evaluation •Customer's rating of each product's performance on each dimension •Weights the customer attaches to each dimension
Bottom-up analysis
Involves selection from all securities within a specified investment universe without prior narrowing of the universe
step 3
In _____ of the marketing planning process, marketing managers decide which markets to target and develop the marketing mix strategies to support how they want to position the product in the market.
Portfolio Manager (PfM)
Is in charge of collecting all project and program information to enable the PEB and PRT to take informed decisions, builds and maintains the Portfolio Management Framework, and manages the Portfolio Management Office.
Writing element (PER)
Is there a "writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein?" Let's shorthand this to an "integration." If no integration, no parol evidence rule. Technically the PER also applies to efforts to contradict, explain or supplement terms on which "confirming memoranda agree."
do-not-call law
Limits the conditions under which anyone on the registry may be telephoned at home or on a cell phone
Franke's formula
K*B=total visits, G+W+R = Time per visit, total visits * timer per visit = total time required
Lost Volume Seller Formula
KP - DC + ID (DC DOES NOT INCLUDE OVERHEAD COSTS)
open Communication
Key building block for building successful relationships •Different for relational and strategic partnership •Relational partnership - Communication goes through the salesperson •Strategic partnership - Direct communication between the buyer and seller •Cultural differences should be considered
Property, Plant, and Equipment
Land, buildings, and equipment used by the business entity. BS-long term.
Strategic Business Units (Bus. Plan)
Large multiproduct firms that have separate divisions; Ex. Toyota, Pepsi
Rejection in finance leases
Lessee can reject goods
Franchising
Licensing+ exerts control over production to ensure consistency
econ creiteria
Life-cycle costing: Method for determining the cost of equipment or supplies over their useful lives •Proves that a product with a higher initial cost will have a lower overall cost
internal stressors
Lifestyle Choices (Caffeine, Lack of Sleep, Overloaded Schedule), Negative Self-Talk (Pessimistic Thinking, Self Criticism, Over Analyzing), Mind Traps (Unrealistic Expectations, Taking Things Personally, All or Nothing Thinking, Exaggeration, Rigid Thinking), Personality Traits (Perfectionists, Workaholics)
privacy laws
Limit the amount of information that a firm can obtain about a consumer
MAD
Money, authority, desire to buy
Nonsystematic risk
Local or limited to a particular asset or industry that need not affect assets outside of that asset class
Functional relationship
Long Term exchanges based on behavioral loyalty --maximize customers value by decreasing sacrafice --out of habit
relational partenership
Long term close relationships, open and honest trust and flexibility
ADVERSE EFFECTS OF UNETHICAL CONDUCT
Losing self-respect and confidence in self •Thinking that the only way to make sales is to be dishonest or unethical •Compromising long-term customer relationships in the pursuit of short-term gain
Fama French four factor model
MKT: excess return on the market portfolio SMB: difference in returns between small-cap stocks and large-cap stocks HML: difference in returns between high book to market stocks and low book to market stocks UMB: difference in returns of the prior year's winners and losers
Survey Methods
Mail questionnaires Telephone interviews Face-to-face interviews Online questionnaires (dominant)
Emotional equation
Maintain and improve relations
Alternative A
Majority Rule S's warranties extend to: a) Any natural person who sustains a personal injury as a result of breach of warranty b) If such person is in B's family or household or a guest in B's home, and c)If such person may reasonably be expected to use, consume, or be affected by the goods.
What to do when buyer says no
Make sure the deal is really dead. Review chain of events. Try to interview client. Stay in touch.
Deciders
Make the final choice For straight rebuys the purchasing agent usually selects the vendor and places the order
Cooperation
Making a contribution to the business; being concerned about the welfare of the business, coworkers, and customers
3. Select Depreciation Method
Management also decides which depreciation method to use for the company's fixed assets. The goal is to select a depreciation method reflecting the pattern that most closely articulates with the revenue generated from the use of the asset. The conceptual framework direct that firms should recognize expenses when they consume benefits in revenue-generating activities.
1. Estimate Useful Life
Management consider a number of different factors in estimating the productive life of a fixed asset. Ex. managers may consider experience using this type of asset in prior years, relevant industry practice, maintenance policy, specific firm usage versus normal usage, and the possibility of obsolescence. Useful life varies by type of asset. Ex. AT&T depreciates its buildings and improvements over 10 to 44 years, office equipment over 3 to 10 years, and cable, wiring, and conduits over 15 to 50 years
Marketing Activities
Managing existing brands, new product dev., pricing, distribution , comm., adv., understanding the market and competitors.
Informationally efficient market
Market in which asset prices reflect new information quickly and rationally
Growth Strategies
Market penetration Market development Product development Diversification
personal selling
Market tool that focuses on interpersonal interactions between buyers and sellers
Value of Marketing
Marketing activities facilitate exchanges that create, communicate, and deliver value to customers. Sellers and society at large also derive value from these exchanges.
Production Era-Product Orientation
Marketing dominated by. A mgmnt philosophy that emphasizes most efficient way to produce and distribute a product. "promotions played minor role" Example Henry Ford Model T
Value from Society's Perspective
Marketing transactions may add or subtract value from society. Stressing socially responsible and ethical decisions is good for business. BP Spill
Disclaiming a warranty
May disclaim warranty of merchantability or fitness for a particular purpose Must mention "merchantability" and be conspicuous Use language such as "as-is" or "with all faults" Buyer's examination or refusal to examine Course of dealing, course of performance, usage of trade Express limitation on remedy to be given effect instead of disclaiming warranty unless limited remedy fails its essential purpose -- UNCONSCIONABILITY serves as a check
Standard deviation
Measure of dispersion in a probability distribution
Treynor ratio
Measure of risk-adjusted performance that relates to a portfolio's excess returns to the portfolio's beta
Sharpe ratio
Measure of the average excess return earned per unit of standard deviation of return
Duration
Measure of the interest rate sensitivity of a fixed-income instrument
Beta
Measure of the sensitivity of a security's returns on the market portfolio
Value at risk (VaR)
Measure of the size of the tail of the distribution of profits on a portfolio for an entity; minimum extreme loss metric
M-squared
Measure of what a portfolio would have returned if it had taken on the same total risk as the market index
Net return
Measure of what the investment vehicle has earned for the investor; accounts for all managerial and administrative expenses that reduce the investor's return
Value Benefit Analysis
Measures the effectiveness of a solution.
Return on investment (ROI)
Measures the performance of an investment by measuring the gain from an investment and the cost of the investment.
Net present value (NPV)
Measures the profitability in corporate budgeting to assess a given project's potential return on investment. Because of the time value of the currency, it takes into account the compounding of the discount rate over the duration of the project.
Diversification ratio
Measures the risk reduction benefits of equal weighting; = standard deviation of the equally weighted portfolio/ standard deviation of the randomly selected security
Portfolio Director (PD)
Member of the Management Board responsible for the Portfolio Strategy. Provides leadership and direction to portfolio management. Heads both the PEB and the PRT.
merchandising
Merchandising is any behaviour-triggering stimulus or pattern of stimuli, other than personal selling, that takes place at retail or other points-of-sale
Clothes on and objection method
Method for handling objections in which the sales person, when hearing a buying signal, tries to answer the objection and close the sale
Acceptance
Methods (1) Affirmative indication after opportunity to inspect, (2) Do nothing after opportunity to inspect, (3) Buyer does something inconsistent with the seller's ownership interest Consequences of Acceptance (1) Buyer must pay (2) Buyer can no longer reject (revocation still possible) (3) Burden shifts to buyer to establish breach (4) Gives rise to "part performance" exception of the SOF
Steps in Strategic planning
Mission, evaluate internal and external env., Set objs sbu, estb. Bus Port, growth strategies
sacrifices examples
Money Transaction costs Psychic costs
Tail risk
More events in the tail of the distribution than would be expected by probability models
Right (positively) skewed
Most of the distribution is concentrated to the left
Left (negatively) skewed
Most of the distribution is concentrated to the right (ex: stock returns)
Why focus on newly acquired customers
New customers may have greater future lifetime value potential than longer tenure customers evidence suggests that retention rates rise over time, so if defections can be prevented in the early stages of a relationship, there will be a pay-off in future revenue streams
No-load mutual funds
No fee for investing in the fund or for redemption, but there is an annual fee based on a percentage of the fund's NAV
Closed-end mutual funds
No new investment money is accepted into the fund; new investors buy existing shares and liquidate by selling to other investors (can sell at a premium or discount to NAV)
Complainers VS NonComplainers
Non-Complainers -- Unhappy customers will tell 9 to 10 other people. Happy customers only tell 3 to 4. Golf Industry -- 80% to 85% of unhappy customers to do not verbally complain -- they just don't come back.
NAFTA
North American Free Trade Agreement - eliminates trade barriers between the United States, Canada, and Mexico
Self-insurance
Notion of bearing a risk that is considered undesirable but too costly to eliminate by external means
Systematic sampling
Nth Number
Checking
Opening merchandise packages, removing the merchandise, making certain the merchandise order has been received
Sales area criteria
Optimum customer processing, profitability, efficient operations, comparison and control, earnings, ethno-cultural aspects
purchasers
Organizational members who negotiate final terms of the purchase and execute the actual purchase
Differences management leadership
Output/input, expenses/value, efficiency/effectiveness, resources/people, internally/externally focused, quantity/quality, past/present&future oriented, rational/emotional
Enterprise risk management
Overarching governance approach applied throughout the entity and consistent with its strategy
Dependability
Perception that the salesperson, and the product and company, will live up to promises made •Can be proved by: •Third-party references, product demonstrations and plant tours •Special presentations, salesperson's experience and training •Time
Combination Approach
Performing multiple approaches at once
Financial Assets may provide one or both of the following types of returns.
Periodic Income and/or Capital Gains or losses
agent
Person who acts in place of his or her company
Merchant (defined)
Person who deals in goods of the kind OR otherwise holds himself as having knowledge or skill particular to the practices and goods involved in the transaction. Or employs an agent having knowledge of such skill
Entrepreneur
Person who starts, bones, managers, and assumes the risk of a business
Observational Methods
Personal observation Unobtrusive measures Mechanical systems
Emotional needs:
Personal rewards and gratification of the person buying the produc
WBG: Infrastructure project lending,
Phase one: ports, railways, flood control, roads, telecommunication missing: education, health, agriculture and urban planning
external types of stressors
Physical Environment (Noise, Bright Lights, Heat, Confined Spaces), Social Interaction (Rudeness, Bossiness, Aggressiveness by others, Bullying) , Organizational (Rules, Regulations, "Red-Tape", Deadlines, Lack of Resources), Major Life Events (Birth, Death, Lost Job, Promotion, Marital Status Change), Daily Hassles (Commuting, Misplaced Keys, Mechanical Breakdowns)
Planning your time
Plan about 70% of your time. Leave 30% for the unexpected.
What are the steps in the portfolio management process?
Planning execution feedback
Operational Planning
Planning done by supervisor mgmnt level, day-to-day execution of functional plan, annual, semi, or even quarterly plan to guide mrkting plan, use marketing metrics
Steps in the portfolio management process
Planning,execution, feedback
Indifference curve
Plots the combinations of risk-return pairs that an investor would accept to maintain a given level of utility
Market portfolio
Point on the Markowitz efficient frontier where a line from the risk free asset is tangent to the Markowitz efficient frontier
Washington Consensus
Policy adopted by the World Bank and imposed on developing countries through SAL 1) that free trade raises the well-being of all countries 2) that competition through trade raises a country's long-term growth rate by expanding access to global technologies and promoting innovation. **** issues 1. no clear sense of priorities in #'s 1-20 2. too rapid 3. Once size fits all to every situation
Actively managed stock mutual funds
Portfolio manager seeks outstanding performance through selection of stocks included in the portfolio
Feedback (relating to portfolio management process)
Portfolio monitoring and rebalancing. portfolio must be regularly monitored. Rebalancing may be required when changes in security prices cause a significant change in weights of assets in the portfolio. Performance measurement and reporting: This step involves measuring the performance of the portfolio relative to the benchmark stated in the IPS and reporting portfolio performance to the client.
Passive portfolios
Portfolios that are based on the assumption of unbiased market prices
Hofstede
Power distance, individualism/collectivism, Masculine/feminine, uncertainty avoidance, long/short term oriented
Reinsurance
Practice of selling some of the risk to another insurer
Objection Prevention
Prevent Objections by discussing them in your presentation before the prospect has a chance to voice them. Identify all possible objections, write them down, script objection responses with closing questions for each. Develop sales tools that enhance & support every response. Rehearse the scripts in role play. Tweak the scripts. Try them out on customers. Make final revisions based on real world situations. Keep documents in a master notebook. Meet regularly as a group to discuss revisions.
- skimming, penetration, prestige, oddeven, bundle
Pricing strategies
ETHICS
Principles governing the behavior of an individual or group •Establish appropriate behavior, indicating what is right and wrong
Hedge funds
Private investment vehicles that typically use leverage, derivatives and long and short investment strategies
With regard to measuring risk, what are the main risk metrics?
Probability standard deviation beta
Risk management
Process by which an organization or individual defines the level of risk to be taken, measures the level of risk being taken and adjusts the latter toward the former
Most vocal political Pressure on tariffs is made by
Producers lobbying for import tariffs
End users:
Producers who buy goods and services to support their own production and operations
Develop marketing strategies (Market plan)
Product Price Promotion Place (Distribution)
Inventory
Products held by the business entity that are planned to be sold to customers.
buying stations
Products included in manufacturing Products and services to support the manufacturing operation
Supplies
Products used by the business entity and not sold to customers.
Project Sponsors
Provide the investments funds for the projects in the portfolio and work closely with the respective project managers in ensuring that the projects are completed successfully.
Using questions to determine needs
Provides a roadmap for you to follow, allows prospects to discover their problems for themselves, determine prospect's buying criteria, salesperson as a diagnostician
Return generating model
Provides an estimate of the expected return of a security given certain parameters
Venture capital funds
Provides financing for companies in their start up phase
Deductible
Provision in policies, a monetary amount of the loss that will be covered by the insured before any claims are paid
Original equipment manufacturer (OEM):
Purchase goods to use in making their products
business-to-business, or organizational, market
Purchases involving competitive bidding, price negotiations, and complex financial arrangements
Derived demand:
Purchases made by the OEMs and resellers depend on the product demand
Predominant Purpose Test
Purpose of the contract in general, Which is the dominant purpose Goods or Services? Majority approach
approach telling
Purpose, explain instructions, demonstrate, feedback, compliment, appointments, monitor&encourage
directing the promotional mix to channel members to gain their cooperation and ordering and stocking the product/ directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product.
Push vs pull strategy
Selling Tools
Quantify the Solution (ROI), Product and Plant Tours, Models, Photos, Illustrations, and Brochures, Portfolio of support materials, Reprints of Articles on Product, Catalogs show product line and specifications, Graphs, charts and test results, bound paper presentations, laptop computer and demonstration software, laptop computers & video, virtual reality, samples.
Recognizing Verbal Buying Signals
Questions -- What color does it come in? Can I get delivery by the end of the month? Recognitions (Positive Feedback) -- I have always wanted a boat like this. I like the features you described. Requirements -- We will need shipment by May 15th. Our staff will need training. Seeks other Opinions -- Who are some other firms that have bought this product recently?
activities ranked by order in production
R&D, Component Production, Assembly, Marketing & Sales
What is true about the imposition of a US tariff on cheese
Raises the revenue of the government
Depreciation Methods
Rather than requiring a particular method of depreciation, U.S. GAAP simply states that the method of depreciation should result in a systematic allocation of the cost of the asset. Thus, firms employ a number of different depreciation methods in practice. 3 most common allocation methods: 1. Straight-line method 2. Units-of-output method 3. Double-declining balance approach
Investments
Real estate, stocks and bonds held for investment purposes.
Buying motives
Reasons a customer is influenced to select a specific product or service.
Emotional buying motives
Reasons to select a product or service, based on a desire to have that specific product or service
What to do when buyer says yes
Reassure customer. Confirm sale and partnership. Reduce buyer's remorse -- forms of regret, fear, anxiety about sale. Compliment buyer on wise decision. Thank customer for order. Ask for referrals. Provide after-sales service.**
Contagion
Refers to crises beginning in one country and "spreading" to other countries This can occur through a few different mechanisms 1. Shifts in expectations and confidence (herding or informational cascades) 2. Asset prices (financial linkage) 3. Capital flight (sudden stops)
Market Research
Refers to the process of collecting, analyzing, and interpreting data about customers, rivals, and the business environment
Rho
Reflects sensitivity to changes in interest rates
Geometric mean return
Reflects the buy and hold strategy; assumes the investment amount is not reset at the beginning of each year and accounts for the compounding of returns
Three factor model
Relative size of the company, relative book to market value and beta
Four factor model
Relative size of the company, relative book to market value, beta and momentum
HM: Interpret Delta High School (In terms of wage growth)
Relative to High School dropouts in locations unaffected by NAFTA, wage growth of a high school dropout between 1990-2000 was lower in locations that lost tariff protection
Dealing with rejections
Remind yourself you are not alone. Forgive yourself. Give yourself a positive pep talk(s). Refuse to give up. Remember you are important because of who you are, not what you do. Positively anticipate rejection & it will not overwhelm you. Broaden your definition of success. Commit to routinely attracting more customers than you need.
Chief risk officer
Responsible for building and implementing a risk framework for the enterprise and managing the many activities
Gross return
Return earned by an asset manager prior to deductions for management expenses, custodial fees, taxes or any other expenses
Return on Marketing Investment
Revenue (or profit) generated by investment in a given marketing program divided by the cost of the program at a given level of risk
Four causes of profit margin growth over time
Revenues grow over time, as customers buy more. Cost-to-serve is lower for existing customers, because both supplier and customer understand the other. Higher prices are paid by existing customers than new customers. Value-generating referrals are made by existing, satisfied customers through their unpaid advocacy.
Liquidity risk
Risk of a significant downward valuation adjustment when selling a financial asset
Model risk
Risk of a valuation error from improperly using a model
Legal risk
Risk of being sued over a transaction or anything an entity does or fails to do
Credit risk
Risk of loss if one party fails to may an amount owed on an obligation
Rogue trader
Risk that a trader/portfolio manager will fail to follow laws, rules or guidelines and put the company at financial risk
Solvency risk
Risk that an entity does not survive or succeed because it runs out of cash
Market risk
Risk that arises from movements in interest rates, stock prices, exchange rates and commodity prices
Operational risk
Risk that arises from the people and processes that combine to produce the output of an organization
Systematic risk (non-diversifiable, market)
Risk that cannot be avoided and is inherent in the overall market
Institutional arrangements for growth
Rule of law Secure property rights Sanctity of contracts Regulation Social insurance
Express Warranty
S says/does something to create the warranty
Alternative B
S's warranties extend to: a) Any natural person who sustains a personal injury as a result of a breach of warranty b) If such person may reasonably be expected to use, consume, or be affected by the goods.
Dogs
SBUs nobody wants
stars
SBUs whose product have dominant market share in high growth markets
Cash Cows
SBUs whose products have a dominant market share in a low-growth market
Discount sale
Sale in which a person receives a reduction from the list price of the product or service
Cash Sale
Sale in which the customer pays for the product or service at the time or the sale.
COD sale
Sale in which the customer pays when the item is delivered
coupouns, rebates, samples, contest.
Sales promotional tools (know at least 4)
Charge sales
Sales transactions in which customers charge products or services to their charge accounts in order to pay at later date
backdoor selling
Salespeople ignore the purchasing agent's policy and contact people directly involved in the purchasing decision
Backdoor selling**
Salespeople ignore the purchasing agent's policy and contact people directly involved in the purchasing decision --going around the back of people invovled
Secure property rights
Secure ownership of assets *** ensures that people get returns on their assets
approach delegating
Select task, formulate assignment, background & objectives, preconditions, monitor progress, confidence, feedback
Custom Research
Single firm; provide answers to specific questions, "why certain trends have surfaced"
Foundation of succesful relationships
Slide 13-20 charts trust communication common goals commit to mutal gain organizational support
Petty Cash
Small amount of cash used for paying small amounts owed (instead of check)
Enclosure
Something in closed with a letter; in the case of a letter of application, a resume is usually enclosed
Capital market line
Special case of the capital allocation line where the risky portfolio is the market portfolio
Risk tolerance
The amount of risk an investor is willing to tolerate to achieve an investment goal
initiators
Start the buying process Could be an executive making a decision
Addition method of counting change
Starting with the sales amount, add the fewest possible coins and bills until you havs bult up to the amount the customer gave you; also known as the manual method or counting forword method.
Statute of Frauds
Statute of Frauds applies if contract is for (1) sale of goods (2) $500 or more - $1000 for a lease Demands the contract be in writing containing signature of the party to be charged and a quantity term. Exceptions 1. Admission by a party that a contract was formed (in a pleading or otherwise) 2. Merchant Exception - (a) Both parties are merchants, (b) Writing (without signature) is received within a reasonable time of formation, (c) Recipient knows of should know of the writing, (d) Recipient doesn't object within 10 days 3. Specially Manufactured Goods for Buyer; Not suitable for sale to others; Seller has substantially committed before buyer's repudiation 4. Part performance - Payment has been made & accepted; or goods have been received and accepted
Display specialists
Store employees who plan and build window and interior displays
Ch. 13
Strategic Partnerships
strategic switching
Strategic switching occurs when customers shift their allegiances from one supplier to another in pursuit of a better deal.
Three levels of business planning
Strategic, Functional, operational, keep big picture in mind
What is stress
Stress is the reaction people have to excessive pressures or other types of demand placed upon them. It arises when they worry that they cannot cope. Stress is the "wear and tear" our minds and bodies experience as we attempt to cope with our continually changing environment.
Finance Lease Parties
Supplier, lessor, lessee
value analys
Suppliers and customers work together to reduce costs and still provide the required level of performance
differential
Suppose a restaurant offers breakfast options 24-hours a day, however, none of the competition even offers breakfast options. This would be an example of a(n) _____ benefit.
Total cost of ownership
TCO looks not only at the costs of acquiring products, but also the full costs of using and servicing the product throughout its life, and ultimately disposing of the product
Analyze an interpret the data
Tabulations and Cross-tabulation
Conditional VaR
Tail loss measure, the weighted average of all loss outcomes in the statistical distribution that exceed the VaR loss
offer
Takes place when salesperson quotes specific terms
Buying change
Taking a large bill from the cash register to exchange for the coins or bills needed to have an adequate supply or change.
Dedicated short bias
Taking more short positions than long positions
Mutual Investment
Tangible investment in the relationship by both parties •Involves spending money to improve the products and services •Must be followed by actions signaling commitme
Consumer Goods
Tangible products that individual consumers purchase for personal or family use
Difference between Tariffs and Quotas
Tariffs: Generate Revenue for the government Quotas: Don't generate revenue, only limit the supply of goods that come in
Leadership styles
Telling, selling, participating, delegating
comparative advantage
The ability to produce a product most efficiently given all the other products that could be produced
Risk appetite
The amount and type of risk that an organization is willing to take in order to meet their strategic objectives.
Jensen's alpha
The difference between the actual portfolio return and the calculated risk-adjusted return
Currency Crises
The domestic currency looses value (depreciates) RAPIDLY compared to other countries. •This causes a decrease in the demand for the domestic currency, lowering its value. Ex: Asia- yen value rapidly depriciated results ins... outflow of capital, downward pressure, and speculative attacks
Full-cost accounting
The firm allocates a proportionate share of all indirect cost incurred by the company to the construction project.
Transfer pricing
The manipulation of the prices of intra-firm trade by multinational enterprises to reduce their global tax payments ***Multinationals adjust costs and prices in different countries to minimize their tax liabilities.
Approach
The first step of a sale, in which the sales person directs the customer's attention to the product or service.
Risk management framework
The infrastructure, process and analytics needed to support effective risk management in an organization
Even exchange
The item originally purchased is exchange for another item at the same price
lead management
The lead management process includes a number of sub-processes, including lead generation, lead qualification, lead allocation and lead tracking
Payback period
The length of time required to recover the cost of an investment.
exchange rate
The measure of how much one currency is worth in relation to another.
Probability
The measure of relative frequency with which one would expect an outcome, series of outcomes, or range of outcomes to occur
Firm Offer
The offeror is a merchant familiar with general business practices—so just about anyone in business acting in mercantile capacity. Doesn't matter if offeree is a merchant or not. The offer states that it will be held open; The offer is in writing; and The offer is signed by the offeror.
Sales order TYPE
The order type defines the processes that the sales doc. will go through during the various customer order transactions.
Sufficient Writing
The required writing need not contain all the material terms of the contract and such material terms as are stated need not be precisely stated. ... The only term which must appear is the quantity term which need not be accurately stated but recovery is limited to the amount stated. The price, time and place of payment or delivery" can all be omitted. 2-201 cmt.
Risk infrastructure
The people and systems required to track risk exposures and perform most of the quantitative risk analysis to allow an assessment of the organization's risk profile
Detailed audit tape
The permanent record of all the cash register transactions, recorded on a tape within the cash register
Buyer benefits
The personal benefits, gain, or satisfaction the customer receives from the product or service.
Global minimum variance portfolio
The portfolio on the minimum variance frontier with the smallest variance return
Minimum variance portfolio
The portfolio with the minimum variance for each given level of expected return
Dissemination risk
The possibility of a foreign partner firm obtaining technology or other know-how from the home-country firm and exploiting it for its own commercial advantage
Cashing Out
The process of balancing the cash drawer and the audit tape by having a salesperson count the money in the cash drawer and record it on the daily balance form; also called proving out.
Risk budgeting
The process of deciding on the amount of risk to assume in a portfolio and subdividing that risk over the sources of investment return
Risk transfer
The process of passing on a risk to another party, often in the form of an insurance policy
Backward Linkages
The purchases of goods from local suppliers by MNE's in the foreign country *** host country benefits
2. Estimate Scrap Value
The scrap value (also referred to as residual or salvage value) is the amount the firm expects to realize on disposal of the fixed asset at the end of its productive service to the firm. The scrap value reduces the depreciable base of the asset, so that the firm only depreciates the cost less scrap value over the life of the asset. Scrap values are designed to minimize or avoid any gain or loss on disposal. Ex. A company sells its fleet of service vans every 5 years. If the dealership allows a trade-in value equal to 10% of the original cost, then there is a 10% residual value. If the company depreciates the vans using a 10% residual value, there would never be a gain or loss on the disposal. Management estimates scrap values based on their experience or relevant industry practice. For example, management teams that estimated residual values for fixed assets used in high-tech industries typically assume a zero scrap value due to rapid advances in technology causing a minimal residual value in a short period of time. As a result, the cost of eliminating scrap values is not worth the benefit.
Delta
The sensitivity of the derivative price to a small change in the value of the underlying asset
Strategic asset allocation
The set of exposures to IPS-permissable asset classes that is expected to achieve the client's long-term objectives given the client's investment constraints; stated in terms of percent allocations to asset classes
Action
The stage in the customer's buying process when the customer decides to buy the product or service.
Conviction
The stage in the customers buying process in which the customer become is convinced that the product or service will satisfy his or her needs
Volatility
The standard deviation of the continuously compounded returns on the underlying asset
What is Value at Risk (VaR)?
The stats used to compute this can be used to estimate average extreme losses. VaR accepted as risk measure by most bank regulators and approved for disclosure for accounting purposes.
Close
The step of these sale in which the customer makes the decision to buy the product or service
Change fund
The supply of money that is counted into the cash drawer at the beginning of each business.
Initial measurement of Basket Purchases
The valuation of assets acquired in a basket purchase includes both homogenous assets (assets that are the same), and heterogenous assets (assets that are dissimilar from one another).
What is portfolio return and what is the formula?
The weighted average of the returns on individual assets. Rp=portfolio return W1=weight of asset 1 W2=weight of asset 2 R1=return of asset 1 R2=return of asset 2
referral schemes
These work by inviting existing customers to recommend a friend and rewarding the recommender with a gift
communication style flex
This is when seller must change his or her selling technique to suit the buyer.
Desire
This stage in the customers buying process in which the customer shows a willingness to own the product or service
Risk governance
Top down process and guidance that directs risk management activities to align with and support the overall enterprise
Functional Planning (Bus. Plan)
Top functional level management CM) implements and controls marketing plan, performs situational analysis, 3-5 year plan to support strategic plan, and annual plan, provides tactics for short term while supporting long term plan, directly involved in planning process
Strategic Planning (Bus. Plan)
Top level corp mgmnt; managerial process that matches firms resources and capability to market opportunities for long term growth(Next 5 years), SBUs
Stolper-Samuelson Theorem
Trade leads to an increase in the return to a country's abundant factor and a fall in the return to its scarce factor; under constant returns to scale, perfect competition, equality of the number of factors to the number of products.
Exchange traded funds
Trade like closed-end funds; prices track NAV due to an innovative redemption procedure (can be shorted or purchased on margin)
Inter-Industry Trade
Trade of products that belong to different industries
RELATIONSHIPS WITH THE SALESPERSON'S COMPAN
Trade secrets: Information owned by the company by which the company gains a competitive advantage •Protected by law •Taking advantage of other salespeople •Poaching: Unethical practice of stealing potential customers from other salespeople
What can you still bring in if there is an integration?
Trade usage, course of dealing, and course of performance are admissible to explain or supplement terms of the agreement
Traded goods and services vs non-traded goods and services
Traded ex- oil Price: determined in world markets Domestic consumption and production can differ causing a trade surplus or deficit Nontraded ex- tailoring Price determined in domestic markets Domestic consumption and production must be equal
4 Selling approaches
Transaction-focused selling System sellig Account management Strategic relationship
sale
Transfer of title to goods by seller to buyer for a consideration known as price
Transitional Phrases or Bridge Statements
Transitional Phrases (or Bridge statements) allow a salesperson to connect a product's features to its benefits. Features to Benefits -- Which, This, That Benefits to Features -- Because, Thanks to, On account of, As a result of, Due to, Since, For that reason This product is nationally advertised, which means you will benefit from more presold customers. (Feature to Benefit.) You will experience increased profits because the first order includes point of purchase advertising materials for the Valentine's Day promotion. (Benefit to Feature.)
Predominant Purpose Test
Trigger - Transaction must be reviewed to determine whether it is a sales or a service contract Ask - What is the predominate purpose of the transaction? If the essence of the contract is a transaction to sell goods, then UCC Art 2 applies. If not, then apply common law. Distinguish - Gravamen Approach: Source of the complaint (not overall essence) determines source of law
Global macro
Trying to capture shifts between global economies (use derivatives on currencies /interest rates)
Boomerang method
Turning the objection into a selling point.
Syndicated research
Type of market research; general information that research companies collect on a regular basis and sell to other firms.
Modifications
UCC does not require additional consideration for modification to be binding Test - Good faith Demonstrable reason for seeking a modification
ETHICAL SELLING
Unethical behavior hinders the relationship between buyers and sellers •Basic principle - Customer remains free to make a choice
poaching
Unethical practice of stealing potential customers from other internal salespeople
business defamation
Unfair or untrue statements to customers about a competitor, its products or its salespeople
USP
Unique selling point, what is unique about your product
price discrimination
Unjustified special prices, discounts, or services to some customers
sales puffery
Unreliable statements that do not state the inherent capabilities of products or services
Vertical Privity
Up the supply chain, beyond the direct seller "who can we sue"
Special treatment
Upsets other customers •Reduces salesperson's productivity
Macroeconomic factor models
Use economic factors that are correlated with security returns
Statistical models
Use historical and cross-sectional return data and analyze them to identify factors that explain variance or covariance in observed returns
Segregated accounts
Used by large institutions, investments are held in an account on their behalf and managed by a portfolio manager/ team
Charge card
Usually a small plastic card with the customers name and account number on it used to charge merchandised to a customers account.
Three factors that influence quality of research
Validity Reliability Representativeness
people buy expectations
Value Proposition. Client Expectations = Salesperson, Product, Company; you must exceed expectations. -- Lifetime customers (long term relationship). Part of customers "team". Buy again. Buy more. Referrals. Enjoyment & Purpose of Job. Financial Rewards.
servic c
Value analysis: Suppliers and customers work together to reduce costs and still provide the required level of performance •Used by salespeople to get customers to consider a new product •Useful for the out-supplier in a straight rebuy situation
Active portfolios
Value assets based on estimates of cash flows, growth rates and discount rates
Types of Privity
Vertical and Horizontal
CLPST Voting Behavior:
Voting behavior in locations most hurt by PNTR with China shifts more Democratic compared to Democratic shift in locations not hurt so much by PNTR with China
UCC DEFINED TERMS RELATED TO SALESPEOPLE
Warranty: Assurance by the seller that the products will perform as represented •Expressed: Oral or written statement by seller •Implied: Not actually stated but still an obligation defined by law
Fixing a BOP crisis (overvalued currency): Demand reduction
Way to adjust if the current account deficit becomes unsustainable & the central bank runs out of foreign reserves to sell---> eventually creates a BOP crisis reduce incomes that households spent on consumption demand for traded and nongraded goods decrease *** cannot be confined to traded goods alone *** causes unemployment *** comes at the cost of internal balance "efficiency of resources" ---Not a positive outcome
Why time management
We all have the same amount of time. It depends on you how effectively you use it. It is about prioritizing. It is about vision. It is about knowledge.
unavailable non-customers
Weakly unavailable non-customers prefer their current brands
Lost Volume Seller
When a S can resell the goods after B's breach, but to someone who would have bought the goods from him anyway such that the resale was not made possible by the breach
Constructed Assets and Overhead Costs
When a company constructs an asset, it may contribute certain portions of the labor and material toward the completion of the project. Ex. a company incurs costs to pay the builders and buy the concrete and steel needed to construct a new headquarters. Firms capitalize direct materials used and direct labor hours expended on the project as part of the acquisition cost of the asset. Indirect overhead costs (ex. general supervisory salaries and depreciation) are generally accounted for using full-cost accounting.
Basket Purchase: Homogenous Assets
When a firm acquires homogeneous assets, it records the PPE at cost and includes it on the balance sheet, assigning an equal amount to each asset. Ex. If a firm acquires five identical laptop computers at a total cost of $5,250, it would value each laptop at $1,050 (5250/5) and report the total cost of $5250 in the office equipment account on the balance sheet
contract to sell
When a salesperson makes an offer and receives an unqualified acceptance
Risk-adjusted discount rate
When analyzing investments or projects for profitability, cash flows are adjusted to the present value to ensure the true value of the undertaking is captured.
Charge take
When customers charge an item and take it with them
Asset Valuation: Nondeterminable Market Value
When the fair values of the asset or the note are not clearly evident, the firm must compute the present value of the note as an estimate of the asset's fair value. The firm computes the fair value of the asset by discounting the note payable at an implied or imputed rate of interest reflecting the market rate of interest that a borrower would incur today under similar terms and conditions. After determining the present value of the note payable, the firm allocates the face value of the note between the asset's acquisition cost (which equals the present value of the note payable) and the discount, which represents the deferred interest expense (i.e. finance charges) When using the effective interest rate method of amortization, the carrying value of the note payable will always the equal the present value of the remaining cash flows discounted at the historical market rate. Separating the asset value from the finance charges is critical for proper expense classification on the income statement. Depreciation affects operating income, while interest expense is a non-operating expense. Ignoring taxes, combining the finance charge with the acquisition cost overstates the asset's carrying value on the balance sheet. Improper management of the asset's cost and the finance charge will also overstate depreciation expense and interest expense on the income statement. pg. 576
Bunch sales
When the sales person records several different sales transactions at once on the cash register.
Reverse engineering
Which of the following processes involves physically deconstructing a competitor's product to determine how it's put together?
Which of the following refers to step 4 in the market planning process?
Which of the following refers to step 4 in the market planning process?
Which situation is the TAA most generous for a congressional district
Workers tend to be employed in industries where workers are likely to be approved for TAA and the state has generous TAA benefits
orders
Written offers from buyers or agents
IPS
Written planning document that describes the client's investment objectives and constraints that apply to the portfolio; must be reviewed and updated regularly
Government
Your local city council or your county commissioners are examples of a(n) _____ market.
diversity
a big choise of something
tying agreement
a buyer is requiered to purchases one product in order to get another --must by paper if by copy machine --reduce competiion, clayton act --legal if the products can be used together --legal in service contract if reputation dpends on it
Extending Revocation period
a buyer's reasonable time for revocation of acceptance may be extended if the buyer relied on the seller's repeated assurances that the defects would be cured but the seller failed to do so
Nonmonetary exchange
a company acquires an asset by exchanging another set with the seller rather than paying cash. Non monetary exchanges are an infrequent way to acquire PPE and are discussed in Appendix A.
well-established
a company like this is known on the market and has a good reputation
Double-Declining Balance Method (DDB)
a decreasing-charge method that applies a constant rate of deprecation against a decline net book book value (defined as cost less accumulated depreciation). The constant rate used in dealing balance methods is a multiple of the straight-line rate. Note that the asset's net book value is the depreciable base for DDB and not the cost less scrap value. Therefore, DDB does not subtract the scrap value from the depreciable base before computing the annual depreciation expense. Firms compute the DDB rate as twice the straight-line rate - hence the term "double" in the title of the method. DDB Rate = 2 * Straight-line Rate or DDB Rate = 2 * 1/Useful Life DDB Depreciation Expense = Net Book Value at Beginning of Period * DDB Rate With the DDB approach, the ending net book value is not always equal to the planned scrap value. In this case, the firm reduces the depreciation expense in the last year to the necessary amount to arrive at an ending book value equal to the scrap value.
Basket purchase
a firm acquires two or more fixed assets together for a single purchase price.
infant industry
a firm that required protection to compete at world prices today. When a government applies a temporary tariff, it expects that costs for the firm or the industry overall will due to learning, thereby allowing it to compete at world prices in the future.
shipping point
a fixed location that carries out shipping activities. Each delivery is processed by only one shipping point.
Seller's Right to a Cure after rejection (after contract time)
a further reasonable time" after the K time ONLY if: a)S had reasonable grounds to believe the non-conforming tender would be accepted (S knew they were non-conforming) AND b)S reasonably notifies B of intent to cure § 2-601 cmt. 2 makes it clear that a B cannot reject and then accept
storage location
a general area where inventory is stored. It allows you to differentiate between various types of stock in a site (raw materials, finished goods, etc.)
import
a good or service brought in from another country for sale
strategic trade policy
a government gives strategic advantage to Home firms in imperfectly competitive markets that would enable them to compete more effectively with Foreign firms.
export subsidy
a payment to firms for every unit exported
personal selling
a person to person business activity in which a person uncovers and satisfies need of a buy for a mutual longterm benfit
Merchant
a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction" or who employs an agent or intermediary having such knowledge or skill 2-104(1).
a prospect
a potential customer
Trade Usage
a practice or method of dealing having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to the transaction
customer
a prospect that purchases
course of performance
a sequence of conduct between the parties to a particular transaction [the transaction at issue] that exists if: (1) the agreement of the parties with respect to the transaction involves repeated occasions for performance by a party; and (2) the other party, with knowledge of the nature of the performance and opportunity for objection to it, accepts the performance or acquiesces in it without objection.
Course of Dealing
a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.
undifferentiated
a single marketing mix for an entire market
Nash equilibrium
a situation in which each player is making the best response to the action of the other player
autarky
a situation in which one country cannot trade with other countries
predatory dumping
a situation refers to a situation in which a Foreign firm sells at a price below its average costs wth the intention of causing Home firms to suffer losses and, eventually, to leave the market because of bankruptcy. It occurs between domestic firms.
antidumping
a tariff applied against the Foreign discriminating monopoly with the permission of WTO
Lease
a transfer of the right to possession and use of goods for a term in return for consideration, but a sale . . . is not a lease."
Fixing a BOP crisis (overvalued currency): Demand switching
a way to achieve external balance and maintain internal balance (Demand reduction cannot maintain internal balance- unemployment ---> therefore we must do both to have a successful adjustment program) *** a change in the nominal exchange rate (devaluation or depreciation) this leads to... increase in domestic prices of imports and exports.... leading to a decrease in the relative price of nontradable goods. decrease in Nominal Exchange Rate, increase in domestic Price of M & X, decrease in Price in non-traded goods... effects: 1. increase in incentives to produce tradable 2. decrease the incentive to consume traded goods
Intellectual Property Rights
a work or invention that is the result of creativity ****dissemination risk has decreased through increased IP protection, because of this there has been a switch from FDI to contractual modes of entry "switching effect"
Conspicuous
a) "so written, displayed, or presented that a reasonable person against whom it is to operate ought to have noticed it." § 1-201(b)(10) •NOT about whether the person actually read it - just about whether a reasonable person would have noticed it b) Conspicuousness determined by ct. c) Key is whether "attention can reasonably be expected to be called to it." § 1-201 cmt. 10 d) Examples of methods of making language stand out: Heading in capitals equal to or greater than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size Language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language
Direct or variable costs
a) Any costs that are directly attributable to the sale b) Cost of the components of the K-ed goods c) Cost to ship or deliver the goods (assuming shipment is included) d) Installation if charged for each individual sale
Overhead or fixed costs
a) Costs that are already paid and are independent of the sale b)Rent & utilities for facility or warehouse c)Advertisements d)Installation if someone is hired for that purpose e)Usually employee's salaries (however, this could be a direct cost if more were hired to complete a particular sale)
Value from Sellers Perspective
making profitable exchange, earning prestige among rivals, nonprofits.
Destination Carrier Contract
a) S is required to send goods to a particular destination b)ROL passes to the B when the goods are duly tendered as to enable the B to take delivery i.Tender of delivery reqs that the S put and hold the conforming goods at B's disposition and give B any notification reasonably necessary to enable him to take delivery (§ 2-503) c)ROL does not pass to B until S gets the goods to the final destination d)B's prefer this type of K e)Look for "F.O.B. B's Place of Business"
Shipment Carrier Contract
a) When K requires that S send goods to B, but does not specify the destination b) Default type of K if none specified c) ROL passes to the B when the goods are duly delivered to the carrier, as soon as they are delivered to the shipper, such as FedEx d) S's prefer this type of K e) Look for "F.O.B. S's Place of Business" f) S must put the goods in the possession of the carrier and make such a K for their transportation as may be reasonable having regard to the nature of the goods and other circumstances of the case (§ 2-504(a)) i. Scenarios where transportation might be unreasonable • Send shipment of ice cream in an unrefrigerated truck • Put wrong address on the shipment g)S must obtain and deliver/tender any document necessary to enable B to obtain possession of the goods (§ 2-504(b)) h)S must notify the B when the goods are shipped so B can inform insurance company (§ 2-504(c))
Finance Lease Elements
a)Lessor does not "select, manufacture, or supply the goods." b)Lessor acquires the goods in connection with the lease. c) 1 of the following 4 is true: • Lessee receives copy of supply K before signing lease K, • Lessee has K approval over the supply K, •Lessee receives statement designating warranties, disclaimers, etc., provided to the lessor before signing lease K, OR •In a non-consumer lease, lessor informs the lessee in writing before signing of the lease K: Identity of the supplier (unless the lessee selected the supplier), That lessee is entitled to supplier's warranties to lessor, and That lessee may communicate w/ supplier and obtain a statement of warranties.
Undifferentiated strategy must be effective under 2 conditions: 1. homogenous market
all customers have similar needs for the product
Recoverable Consequential Damages for Buyers
a. 1st category: damages of any kind, including purely economic loss i.B can recover under this provision if B can establish: a)Damages were foreseeable at time K was made b) Damages were caused "in fact" by S's breach, AND c) Damages could not have been mitigated by reasonable efforts/cover by B b.2nd category: covers personal injury or property damage caused by breach of warranty i.B can recover under this provision if B can establish: a) Damages AND b) Proximate cause
Voidable Title
a. A person w/ voidable title has power to transfer good title to a good faith purchaser for value (§ 2-403(1)) i. Benefits the good faith purchaser for value, not the individual w/ voidable title b.One gets voidable title when goods have been delivered under a transaction of purchase even though i. Transferor was deceived as to the identity of the purchaser ii. Delivery was in exchange for a check which is later dishonored iii. It was agreed that the transaction was to be a "cash sale" iv. The delivery was procured through fraud punishable as larcenous under criminal law c. What matters is transferor's intent - must be intent to voluntarily transfer i. A loans to B, no voidable title b/c no intent to transfer ii. Theft breaks the chain of title
Procedural Unconscionability
a. A problem w/ formation or context of the K b. An absence of meaningful choice c. Falls short of fraud, but still gives ct. bad feeling about the K d. Some cts. say that a K of adhesion by itself is procedurally unconscionable i. These are offered on a "take-it-or-leave it" basis and the less powerful party has no choice but to adhere to the proffered terms e. Consider if there are any good faith issues considering the relationship b/w those involved f. Consider B's credit; however, that may mean S needs to take preventive action to ensure payment g.Consider Maxwell v. Fidelity - D taking advantage of people living at the poverty line.
Substantive Unconscionability
a. A problem w/ the term or terms themselves b. K terms which are unreasonably favorable to the other party c. A term which "no sane man not operating under a delusion would make and ... no honest man would take advantage of." d. Consider acceleration clauses; however, they are not uncommon
LVS Breach before s completes production of goods and S decides not to complete production formula
a. Formula: KP - DC + ID + CI - RP i.CI = costs reasonably incurred ii.RP = payments or proceeds of resale
Types of title
a. Good title (or, just "title") b. Void title (really, "no title"— a person w/ void title has nothing to pass on) c.Voidable title
What keeps Trade usage out
a. If parties have carefully negated trade usage or course of dealing. § 2-202 cmt. 2. b. Saying "trade usage shall not be used to explain or supplement this agreement" is probably not enough. You have to mention the particular trade usage or course of dealing. Ct. will look for something explicit. c. If the trade usage, course of dealing, or course of performance contradicts something in the writing, it will probably not be considered. However, the contradiction must be pretty clear. § 1-303(e).
Exclusive Source of Supply
a. Implicated when "a particular source of supply is exclusive under the agreement" or when "a particular source of supply is shown by the circumstances to have been contemplated or assumed by the parties at the time of contracting." § 2-615 cmt. 5 b. Failure of an agreed source typically excuses performance b/c production by the agreed source is, w/out more, a basic assumption of the K c. S can only avail itself of excuse based on failure of an agreed source if S "has employed all due measures to assure that his source will not fail" § 2-615 cmt. 5 d. S must turn over to B its rights against the defaulting supplier (i.e., the right to sue for breach of K). e. When the S is also the supplier: i. Cts. are split on whether the S can argue excuse based on failure of an exclusive source of supply, but most cts. do not entertain this argument
S's Duty to Give Notice to B (contract resale damages)
a. In a private sale, S must give notice to B of his intention to resell b.In a public auction, S usually has to give notice to the B w/ some exceptions, such as perishable goods or goods that threaten to decline in value speedily
Revocation (2-608)
a. Must occur w/in reasonable time after non-conformity discovered or should have been discovered, b. Must not have been any substantial change in the condition of the goods (except as caused by the non-conformity) c.Revocation not effective until notification is given.
How to take advantage of Comm Impracticability
a. S must notify the B seasonably of any delay or non-delivery b. If only part of the performance is made impracticable, the S must allocate and give timely notice to the B of the allocation
Situations in which the goods are held by a bailee
a. Usually when goods are sold w/out being moved - being bought from a warehouse and B takes them from the warehouse b. Usually involved a person engaged in storing goods c. ROL passes to the B when 1 of the 3 situations is met: i. B receives a negotiable document of title covering the goods ii. Bailee acknowledges that the B has the right of possession iii. B receives non-negotiable document of title or other written direction for bailee to deliver the goods
Consequential Damages for Buyers
a.3rd party damages (e.g., B made a K with TP in reliance on S's performance; when S breached, B was forced to breach K with TP and pay damages to TP) b.Lost profits (e.g., the goods are needed to help run B's business and when they are not delivered on time or are non-conforming B's business suffers—maybe an oven for a restaurant for example ) c.Physical injury or property damage (e.g., defective goods cause damage)
Liquidated Damages test
a.Anticipated OR actual harm, i.Consider California & Hawaiian Sugar Co. where $17K/day damages held reasonable b.Difficulty of proving loss, and c.Difficulty of obtaining an adequate remedy
3 Situations for Action for the price
a.B accepted the goods; i.A wrongful rejection (goods perfectly tendered, but still reject w/out a substantive basis for it) DOES count as a rejection and prevents an action for the price based on acceptance (§ 2-709(3)) ii.An ineffective rejection (a procedural problem w/ the rejection like it comes too late or no notice is given) does NOT count as a rejection. iii.A justified revocation "erases" or undoes the acceptance. b.Goods are damaged or destroyed while ROL is on B; OR c.S is unable to resell at a reasonable price goods identified to the K. i.Goods identified to the K: goods are identified to the K when you say it, not when you necessarily do it (§ 2-501)
Insolvent
a.Having generally ceased to pay debts in the ordinary course of business other than as a result of a bona fide dispute; b.Being unable to pay debts as they become due; OR c.Being insolvent w/in the meaning of bankruptcy law (§ 1-201(b)(23))
adaptive selling
ability of salespeople to change their sales messages based on various customer situations
Open end Funds
accept new investment funds and issue new shares at a value equal to the fund's net asset value per share at the time of investment. These funds also allow investors to redeem their investment in the fund at the prevailing net asset value per share.
Closed end funds
accept no new investment money into fund. shares in the fund are traded in the secondary market so new investors invest in the fund by purchasing shares in the market and liquidate by selling shares in market. shares of this type of fund are priced off of the demand. if high they go for more if low demand they sell at a discount.
Selecting the right metrics in control process should
account for short-term objectives balanced against firm's long-term sustainability
What is the money weighted return?
accounts for amount of money invested in each period and provides info on the return earned on actual money invested. this also equals the Internal rate of return of an investment.
What is risk shifting and what is it associated with?
actions that change the distribution of outcomes. associated with derivative contracts and risk modification vehicles. This is used when organization wants to modify probability distribution of returns, or adjust the payoff diagram of its risk exposures.
Consumer marketing channel
activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption.
Marketing AMA Definition
activity, set if institutions, and processes for creating, communication delivering, and exchanging offerings that have value for customers, clients, and society at large.
Reference group
actual or imaginary individual or group that has a significant effect on an individual's evaluations, aspirations, or behavior?
hiearchy of success/marketing
actual purchase conviction brand preference awareness unaware
communication methods
advertising PR Personal Selling Word of mouth
Capitalizing or expensing an expenditure for a fixed asset
affects the financial statements differently. When a firm expenses an item, earnings are reduced for the full amount in the first year. When a firm capitalizes an expenditure, assets increase and earnings are reduced only for the depreciation expense in the first year. Therefore, firms may prefer to capitalize expenditures whenever possible in order to avoid the larger decrease in earnings in the first year. Of course, future earnings will decrease, but by a lower amount than expensing immediately.
price volatility
ag prices tend to be more volatile than the prices of non farm good and services
demographic variables
aggregate population characteristics like age, gender, fertility, race, ethnicity income
marketing bill
all cost associated with marketing at home, away from home
What is Operational risk? this is related to non financial risks.
all internal risks that arise from people and processes that work together in an organization to produce its output. Ex. hackers breaking into company's computer systems.
Mass Market
all passive customers in a market regardless of the differences in their specific needs and wants
Possession Utility
allowing consumers to own, use and enjoy the product. Ex. Bridal place has a range of gown options
nueral networks
also known as machine-based learning, are another way of fitting a model to existing data for prediction purposes. represented by complex mathematical equations, with many summations, exponential functions and parameters.
Life Time Value of a customer
amnt customer spends minus cost to maintain relationships
Accounts Receivable
amounts a company has a right to collect because it sold goods/services on credit to a customer
Prepaid Advertising
an ad for a company that has not yet run
needs satisfaction
an approach to selling based on the notion that the customer is buying to satisfy a particular need or set of needs.
stimulus response
an approach to selling where the key idea is that various stimuli can elicit predictable responses from customers.
Notes payable
are formal credit arrangements between a creditor (lender) and a debtor (borrower) requiring the payment of a stated face amount on a specified maturity date. In a straight-forward notes payable issue, the face value of an interest-bearing note is equal to the cash price (i.e. the fair value) of the asset. In this case, for the initial measurement, the firm debits the asset and credits the notes payable for that amount. The firm recognizes interest expense each period on the unpaid balance of the debt and pays the debt in full at maturity.
Exchange-traded Funds
are similar to mutual funds, but investors can buy and sell ETF shares in the same way as shares of stock. Management fees are generally low, though trading ETFs results in brokerage costs.
Weighted-average accumulated expenditures
are the construction expenditures weighted by the portion of the year that the expenditure is outstanding until the project is complete, or the end of the year if the project is not complete.
situation questions
ask about facts, background data, and information about the customer's situation. These often bring little value to the Buyer
implication questions
ask about the effects, consequences, or implications of the customer's problems
need pay off questions
ask about the value or usefulness of a proposed solution
Portfolio Analysis
asses the growth potential for a firms SBUs and product lines; BCG
Cash
asset of a company that includes currency, coins, checking accounts, and un-deposited checks from customers
Inventory
asset of company's products that are still awaiting to be sold
Supplies
asset representing the cost of supplies at one point in time (inventory)
aspiration
associates the product with a desirable outcome or lifestyle
Global macro funds
attempt to profit from changes in the overall macroeconomic environment using derivatives on currencies and interest rates.
Event Driven Funds
attempt to take advantage of specific company events, such as mergers and acquisitions.
persuasion
attempting to influence the buyer's decision, but decision remains the buyer's
Casual Research
attempts to understand cause-and-effect relationship. Ex: sales, promotion, will sales volume increase
AIDA
attention, interest, desire, and action
frequency
average number of times that a targeted audience member is exposed to an ad or campaign
Risk prevention and avoidance
avoiding every risk would be unwise as benefits from taking certain risks can outweigh associated costs. like putting all you retirement assets in cash you are losing 2% a year from inflation but you have no risk.
embargo
ban ; government prohibits the import of that item
unconscionability
basic test is whether, in light of the commercial background and the commercial needs of the particular trade or case, the clauses involved are so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract."
likability
behaving in a friendly manner and finding a common good b/w buy and seller ---increased personal communication
value equation
benefits / sacrifices
Value
benefits received by the customer from a product relative to total costs. Marketing activities lead this to creation through innovation that enhances customer benefits and reduce costs.
buyer profit
benefits-selling price + time and effort purchase
Merger Clause
best evidence of complete integration
solo exchanges
both buyer and seller puruse bast interst
Exploration
both parties explore eachother
Sales people are
boundry spanners
intuitive segmentation
brain storm segmentation variables
Customer Loyalty drivers
brand/product/service=38%==a must but is a threshold Sale exp=35% P
illegal business practices
busines defamation reciprocity trying agreeement conspiracy collusion
Straight rebuy
business-to-business term that refers to the routine purchase of items that a B2B customer regularly needs
Reseller
buy finished product and resell them to business and consumer ----max roi
Producers
buy products and services to manfacture and sell to customers
market
buyers and sellers interact to make economic decisions
exchange
buying and selling
Ch 3.
buying and selling relationships
1 and done
buys once then never again
conflicting objectives
company salesperson customer
PER consistency Element
c. If the additional terms are "such that, if agreed upon, they would certainly have been included in the document in the view of the court, then evidence of their alleged making must be kept from the trier of fact." § 2-202 cmt. 3 d. Cts. will often ask if the additional terms are in "reasonable harmony" w/ the integration. i. If yes, they are consistent. ii. If not, they are inconsistent and won't be permitted in. e. Consider the sophistication of the parties i. The more you can show a party didn't know to include every term, more likely to get in the parol evidence
Realtionship marketing
companies attempts to develop a stroner relationship w/there companies
customercentric
making the customer the center of everything the salesperson does
What are gross returns?
calculated before deductions for managerial expenses, custodial fees , taxes & other expenses that are not directly linked to generation of returns. trading expenses (commissions) are accounted for in computation of these returns.
customer acquisition cost
calculated by dividing all the costs spent on acquiring more customers by the number of customers acquired in the period the money was spent
Emotional Analysis
can analyze the content of social media communications within the context of a specific brand or product and determine what emotional category the communication fits within.
adding middle men
can be cheaper by outsourcing
Big Data
can be seen through examples such as the success of the Oakland Athletics, a major league baseball team that used the analysis of large data sets to help identify undervalued players and make strategic decisions in games.
Division
can be used to segment a business into product lines
Vega
captures the impact of changes in the volatility of the underlying asset on the value of an option contract.
Gamma
captures the impact of relatively large changes in the underlying asset on the value of the derivative.
segmentation variables
characteristics of individuals, groups, or organizations used to divide a market. Theres no best way to segment markets
demographics
characteristics of population
Points of difference
characteristics of the product that make it superior to others
see slide 13-7
chart
geodemographic segmentation
clusters people by zip codes for neighborhoods based on lifestyle
Four types of engagement
cognitive engagement affective engagement behavioural engagement social engagement
World Bank Group
collection of agencies, established in 1945, headquartered in washington DC, which promotes development in medium and low-income countries with project loans, structural adjustments programs. and various advisory services
production possibilities frontier
combination of multiple outputs that could be produced given the amount of resources and technology
Promotion
communication and incentives ; different activities marketers undertake to inform consumers about their products and to encourage potential customers to buy these products. Aid distribution of product. Example: "Marketing Comm.", adv., personal selling, publicity and sales
boundry spanners
connect business and product
market segment
consist of individuals, groups, organizations that share one or more similar characteristic
Long-Term Operating Assets
consist of tangible fired assets (also referred to as property, plant, and equipment), natural resources, and intangible assets. Typically have a significant impact on a firm's financial statements.
Market
consists of all consumers who are a common need that can be satisfied by a specific product, and who have resources, willingness and authority to purchase
Post-purchase evaluation
consumer is experiencing cognitive dissonance regarding his or her purchase, the consumer is on what step of the consumer decision-making process
Benefits
consumer received benefit when needs are satisfied
User-generated Content
consumers engage in marketing activities such as creating an advertisement
Product choice
consumer decision-making process is a consumer likely to be in if heuristics such as brand loyalty and country-of-origin are factoring into the decision
contract enforcement
contract design, escape clauses, and recourse *** allows parties to enter into long term contracts with a minimum degree of certainty
Internal Environment
controlable elements within the company. Ex; employees, supply chain, patents, reputation
customer lifetime value
costs are higher and profits are lower if every customer is a first-time customer
What are Fidelity bonds?
cover against losses that result from employee dishonesty. this assures one party that it bears no risk for the actions of a specified other party.
product dev. Strategy
create growth by selling new products in existing markets
Product specifications
creating a written description of the quality, size, weight, color, features, quantity, training, warranty, service terms, and delivery requirements for the purchase
Sustainability
creating products that meet present needs while ensuring future generations can have their needs met. Ex. Green Marketing
Marketing
creating, communicating, delivering, and exchanging offerings that benefit customers, the organization, and society
Prospect customer
customer fits the target market profile and is being approached for the first time
Client manager
customercentric 24/7 services
primary data research
data from research conducted to help make a specific decision
Structured data
data that is typically numeric or categorical; can be organized and formatted in way that is easy for computers to read, organize, and understand; and can be inserted into a database in a seamless
persausion
decision still remains buyers with attempts made to influence it
problem solving
define the problem, generate alternative solutions, evaluate alternative solutions, continue selling until purchase decision
Derived demand
demand for industrial products and services that is driven by, or derived from the demand of consumer product and services
derived demand
demand in a business market is closely associated with the demand for consumer goods
Inelastic demand
demand in which changes in price have little or no effect on the amount demanded
4 major variable categories
demographic, geographic, psycograohic, behavioristic variables
Contingencies for possible commercial impracticability
depends on how unforeseeable they are though a) War(careful) b) Embargo c) Local crop failure d) Unforeseen shutdown of major sources of supply or the like
Units-of-Output Method
derives a rate of depreciation per unit produced and applies that rate against the actual number of units produced each period. Ex. Number of miles driven could be used to depreciate a delivery truck. Depreciation expense is the depreciable base divided by the estimated total units of output times the actual number of units produced each period. The depreciable base is cost less estimated scrap value. Depreciation Rate per Unit = Depreciable Base/ Estimated Total Units of Output Units-of-output Depreciation Expense = Depreciation Rate per Unit * Actual Units produced or Units-of-output Depreciation Expense = Depreciable Base * (Actual Units of Output/ Estimated Total Units of Output)
affective advertising
developing a liking for the product, and generating preference
Needs
difference between actual and desired, physiological or psycho Example: hungry--> eat
Search engine optimization (SEO)
digital marketing methods refers to a systematic process of ensuring that your firm comes up at or near the top of lists of typical search phrases related to your business
ROI (Return on Investments)
direct financial impact of a firm's expenditure of a resource, time and money
influencers
direct or indirect provide info econ influ--concerend about finianical aspect tech influ: makes sure the tech requriements are met coach; advises and directs sales person in a buying process leading to sale
Market Segments
distinctive group of customers within a larger market who are similar to one another, but different. BMW vs. Ford
Trademark
distinctive word, phrase, symbol that distinguishes the source of goods (intangible)
Stratified Sampling
divided population into segments
behavioristic segmentation
division of market according to benefits that customers want from product
Expansion
do we buy more or give more exclusisve deals
Marketing Plan
document that explains the marketing strategy
Suspect customer
does the potential customer fit your target market profile?
appreciate
dollar strengthens
depreciate
dollar weakens
Land Improvements
enhancements to a plot of land to make the land more usable
Simple random sample
equal chance
Sales people are
ears and eyes of the company skillful at disseminating knowledge acquired from customers to other people in their companies
Land
earth and environmental attributes that a company sits on or owns with property, long term asset
convenient
easy to use, easy to get to
orgnizational needs and criteria
economic quality service
effort
effort it takes to sell
Equity market neutral funds
eliminate exposure to overall market movements by taking short positions in overvalued securities and long positions (of nearly equal value) in undervalued securities.
Manipulation
eliminating or reducing a buyer's choice unfairly
manipulation
eliminating or reducing buyers choice unfairly
ehtical check list
embaressed if customer found out superviser ? most sps? get away? upset if a sp did this to me family or friend think less? possible consequences upset if it was published would it be worse offf? ###if any is yes it is unethical
Attiudinal loyal
emotional attachement to brand person or salesperson--strong connection
diversification strategy
emphasize both new products and new markets to achieve growth
Dissolution
ending because of some negative relationships
External environment
factors outside the firm which could be a positive or negative impact. Ex; economy, competition
Market research primary vs secondary data
facts and figures that are newly collected for the project/ facts and figures that have already been recorded prior to project at hand.
Questionnaires
failing because of telemarketing
misrepresentation
false claims by a salesperson
retail price
farm value
online research
fastest way to collect data; it's also less expensive, and perhaps the most versatile, as marketers can use the Internet for both exploratory research, via online focus groups and in-depth interviews, and descriptive research via Internet surveys
Balance Sheet
financial statement that summarizes a company's assets, liabilities, and shareholder's equity at a certain point in time
Corporate Citizenship
firm's responsibility to the community in which it operates to society in general
Mission Statement
formal document that describes the firm's overall purpose and what it hopes to achieve in terms of its customers, products, and resources
Sheth's five types of value
functional social emotional epistemic conditional value
U.S.- future prospects
future of developing country agriculture lies in markets of the developing world
Cost per order
gaining an order in terms of the marketing investment made to turn a Web site visitor into a customer who has chosen to make a transaction
variables for segmenting business markets
geographic location, type of organization, customer size, product use
Set Org. or SBU objectives
goals and objectives should be direct outgrowth of the mission statement.
imports
goods and services from other countries
exports
goods and services sent to other countries
rules of origin
goods must have a certain content requirement in order to be considered duty-free within the FTA
Investments
goods that can be used to bring in future wealth
Industrial Goods
goods that individuals or orgs buy for future processing or for their own use when they do business Example: automakers buy steel
subsidy
government makes payments to local supplier to reduce the production costs of the supplier
Sovereign Wealth Fund
government owned investment fund. usually established to invest revenues from finite revenue sources to benefit future generations of citizens or to manage a country's foreign exchange reserves
standard
government sets regulations to ensure safety of goods
How long do firm offers stay open
held open for the time period stated in the offer, or, if no time is stated, for a "reasonable time." Note: The period of irrevocability under 2-205 cannot exceed three months.
elastic
highly responsive to change in price
Subcontracting
home country contracts with foreign country to product a product with specific materials (outsourcing and manufacturing)
Joint Venture
home country establishes a seperate firm in a foreign country that is jointly owned by a company in that foreign country
Promotional strategies (Market plan)
how marketers communicate a product's value proposition to the target market. Advertising Sales promotion
Accountability
how much value an organization marketing activities creates
Exchange rate
how mush $ in terms of other currency
Price fluctuation in commercial impracticability
i. An increase in cost or price fluctuations alone usually cannot suffice as an unforeseen circumstance (Resources Investment Corp. v. Enron Corp., § 2-615 cmt. 4) a) For a price fluctuation to be unforeseeable, would have to be beyond the realm of what anyone could anticipate
How to reject goods
i. B has to reject w/in a reasonable amount of time, AND ii. S has to be seasonably notified (§ 2-602)
Revoking acceptance under finance leases
i. Finance leases are harder to revoke than non-finance leases, esp. when it is a non-consumer finance lease ii.Can only revoke where the finance lessee's failure to discover the non-conformity before acceptance was reasonably induced by the lessor's assurances. a)Finance lessor typically does not make any assurances. b)Usually when lessor says "pick this one, I've done extensive testing on it."
Good faith purchaser for value
i. Good faith - honesty in fact and observance of reasonable commercial standards of fair dealing (§ 1-201(20)) a) Subjective standard: honesty in fact b) Objective standard: reasonable commercial standards of fair dealing ii. Purchaser - a person who takes by purchase - taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property (§ 1-201(30), (29)) iii. Value - person gives value for rights if person acquires them in return for any consideration sufficient to support a binding K (§ 1-204)
Non Merchant Buyer Obligations after rejection
i. Hold goods w/ reasonable care at S's disposition for a time sufficient to permit S to remove them ii. Cannot use the goods at all for any period of time post-rejection iii. Can hold on to goods as leverage to get $ back (§ 2-711(3))
Merchant Buyer Obligations after rejection
i. Must hold goods w/ reasonable care and not act like those goods are his AND: ii. If S has no agent or place of business in the market, "follow any reasonable instructions from the S" regarding the goods (§2-603(1)) iii. If goods are perishable or would decline in value speedily, B must make reasonable efforts to sell them for the S's account. iv. Even a merchant B can hold onto the goods until it gets $ back
Supplier
i. Party that supplies the goods that will be leased to the lessee ii. A person from whom a lessor buys or leases goods to be leased under a finance lease (§ 2A-103(1)(x)) iii. Has a supply K with the lessor: a K under which a lessor buys or leases goods to be leased under a finance lease (§ 2A-103(1)(y))
When lessee accepts goods
i.Hell or High Water Provision arises for non-consumer finance leases (§ 2A-407) a)Makes the lessee's promises under the lease "irrevocable and independent" b) However, lessee can still revoke, but it will be an uphill battle
risk of loss passing to the buyer
i.If the S is a merchant → on B's receipt of goods a) Receipt of goods means taking physical possession of them (§ 2-103(c)) ii. If the S is not a merchant → on tender of delivery a) Tender of delivery reqs that S put and hold the conforming goods at B's disposition and give B any notification reasonably necessary to enable him to take delivery (§ 2-503)
Revoking acceptance under a non-consumer finance lease (§ 2A-517(2))
i.Lessee can revoke in same ways under Art 2, BUT ALSO ii.Lessee may revoke acceptance of a lot if the lessor defaults under the lease K [not the supply K] and the default substantially impairs the value of that lot or commercial unit to the lessee a)This provision is there when the lessor is supposed to provide maintenance or there is some continuing obligation for the lessor to do something in the lease - maintaining the goods, paying taxes, checking the goods every 3 months, etc.
Seller's Right to a Cure after rejection (waiver in contract time)
i.S has unfettered right to cure so long as S gives seasonable notice of intent to cure b.After K time has expired: S may cure w/in "
PR
impersonal unpaid
prospecting
important process of locating potential customers for a product or service (lifeblood of selling)
comparative advantage
in the production of a good if it can produce that good at a lower opportunity cost relative to another country
Money-weighted rate of return
internal rate of return on a portfolio based on all of its cash inflows and outflows - calculate by considering the beginning value and additional deposits of cash by the investor to be inflows and considers withdrawals of cash, interest, and dividends (which are additional cash available to be withdrawn) and the ending values to be outflows - PVinflows=PVoutflows
SWOT
internal strengths ans weaknesses, external opportunities and threats , used by managers
go to market staretgies ex
internet, field, resellers
information
interpreted data
Market development strategy
introduce existing products to new markets
Product life cycle (be able to draw and label this!)
introduction stage, growth stage, maturity stage, decline stage.
IDEA
introduction, delivery, explaination, ask
hybrid or balanced funds
invest in both bonds & equities
Emerging Market Funds
invest in companies in emerging markets by purchasing corporate or sovereign securities.
Money Market Funds
invest in high quality short term debt instruments.
personal selling creates economic exchange
involves profits for both parties seller profit:=sales-cgs-time/effort buyer profit **have to increase benefits
Capital expenditure
is a cost recorded by a company as an asset rather than an expense.
BCG growth market share matrix
is a portfolio analysis model developed by the Boston Consulting Group that assesses the potential of successful products to generate cash that a firm can then use to invest in new products.
value
is the customer's perception of the balance between benefits received from a product or service and the sacrifices made to experience those benefits
Shrinkage
is the industry term for inventory and cash losses from shoplifting and employee theft.
Capitalization
is the process of recording an expenditure as an asset.
Depreciation
is the systematic and rational allocation of the cost of a long-term plant asset to expense over the asset's expected useful life. As the asset is depreciated, the firm reports depreciation expense on the income statement and reduces the carrying value of the asset on the balance sheet. Depreciation is a process of allocating costs to the periods in which the benefits are consumed. Land is not depreciated because it typically has unlimited life - generally, it is not consumed in operations.
data warehouse
is where companies store and process data.
What is a risk management framework?
it is the infrastructure, Process, and analytics required to support the risk management function in an organization. every organization must have a customized risk management framework based on its individual objectives and requirements.
Place
key to making the product available to consumers at desired time and location. Closely tied to supply chain. (Linked to distribution)
Predictive analytics
large quantities of data within variables that have identified relationships to more accurately forecast specific future outcomes
inelastic demand
less responsive to changes in price
export
limit on the amount that firms are allowed to export
Buildings
long term asset that includes the cost of the building of a company (not including land)
strategic partnerships
longterm relation LT strategic investment for improvement *beyond trust create strategic advantage in partnerships **uncover joint opportunities
Awareness
looking for parties
Three ways to create customer-perceived added value
loyalty schemes customer communities sales promotions
profit margin
make on each sale
Place Utility
making prod. available where consumers want them. Ex. Rent the runway: services rents dresses than buy at fashion shows
Sales- Selling Orientation
managerial view of marketing as a sales function, or a way to move products out of the warehouses to reduce inventory/ "Emphasizes on aggressive promotional activities" EX: Post-World War II prod. exceeds demand, led bus. to focus on one time sales
trade sales perosn
manufact selling to a distrubtor
Basic disciplines for CPM
market segmentation sales forecasting - we will cover this is a class on its own activity-based costing customer lifetime value estimation data mining
micromarketing
market segmentation focuses on very small geographic markets
Target market
market segments on which an organization focusses its marketing plan and toward which it directs its marketing efforts.
behavioral systems approach
market structure-market power, examining the performance of management decisions made by coordinating the interdependent forms
Societal marketing Concept
marketers must satisfy customers needs in ways that also benefit society and deliver profit to the firm
Digital
marketing channels are those specific means of distribution through which digital marketing communications can be delivered to current and potential customers.
breakdown approach
marketing manager develops a general economic forecast for a specific time period. next the manager estimates marketing potential based on forecast . Derives sales potential from forecast
buildup approach
marketing manager estimates how much a potential buyer in a geographic area will purchase . then manager multiplies that by potential buyers in the area
30s prduction
marketing sales shortterm provider taking orders and deliver goods
Sensory marketing
marketing techniques that link distinct experiences such as a unique fragrance with a product or service
B's rights where B receives notification of a material/indefinite delay or an allocation
may, by written notification to the S, and where the prospective deficiency substantially impairs the value of the whole K: i. Terminate and thereby discharge any unexecuted portion of the K, OR ii. Modify the K by agreeing to take his available quote in substitution
cross buys
me and bought out cometitors
Goods
means all things (including specially manufactured goods) which are moveable at the time of identification to the contract for sale other than money in which the price is to be paid, investment securities (Article 8) and things in action. 'Goods' also includes the unborn young of animals and growing crops and other identified things attached to realty as described in the section on goods to be severed from realty. (Section 2-107).
Risk budgeting
means of allocating investments or assets by their risk characteristics
Beta
measure of a security's systematic risk, which is actually the risk that investors can expect to be compensated for in the form or a higher expected return. for example if a stock has a beta of .3 it means it is 30% less volatile than the benchmark or market. It can also be the measure of the sensitivity of a security's returns to the return's on the market portfolio
Single dimensional risk
measures include standard deviation, beta, value at risk (VaR), and scenario loss.
What is standard deviation?
measures over which a percentage of outcomes would be expected to occur.
Rho
measures the sensitivity of the value of a derivative contract to changes in interest rates.
What is Delta?
measures the sensitivity of the value of a derivative to a small change in the underlying asset.
Control
measuring actual performance, comparing performance to establish market objectives or strategies, and make adjustments to analysis
Market Intelligence
method by which marketers get info about whats going on in the world that is relevant to their business. Ex; monitoring sources like websites
Triple Bottom-Line Era
mgmnt seeks to maximize financial, social, and environmental bottom lines/ "societal marketing concepts" ROI
Natural Resources
minerals, oil reserves, timberland, stone quarries, etc that are long term assets of a company
steps in the buying process
model 3-11 1. recognition need 2.define product type need 3. detailed specification 4. search for qualified suppliers 5 .acquisition and analysis proposals 6. evolution of proposals and selection of supplier 7. place and receiver order 8. evolution of product performance
developing countries
more income elastic compared to developed countries
30-60s
ms
sales promotion
ny behaviour-triggering temporary incentive aimed at prospects, customers, channel partners or salespeople
How to choose a method for modifying risk.
must weigh the costs versus benefits in light of risk tolerance.
value for customers
needs, wants, benefits, demand
pioneers
new products, new customers, or both
types of organizational buying decisions
new tasks modified rebuy straight rebuy
Unstructured data
non-numeric information that is typically formatted in a way that is meant for human eyes and not easily understood by computers
inside sales
nonretail salespeople who remain in their employer's place of business while dealing with customers
recently
not long ago (в последнее время)
reject
not to accept, to say no
Personal observation
occur in a grocery store when a researcher watches consumers actions as they take place
Non store retailing
occurs outside a retail outlet through activities that involve varrying levels of customer (snifff) and retailer involvement.
Inventory sourcing
occurs when the order is created or changed (and again when the delivery process begins). Determines: 1. availability 2. date for delivery 3. how will product be supplied
types of producers
oem end users
Firewall
ombination of hardware and software that ensures that only authorized individuals gain entry into a computer system
Business Planning
on going process that guides short-and long term decisions. Build firm's strength, improves decision making, develops objective for goals
What are methods of risk modification?
once required analysis is done and organization has determined which risks it is exposed to and which ones are acceptable/unacceptable and to what degree, the risk mngt proceeds to alight actual risk with acceptable risk. this is not always related to reducing risk. for example say you have a 50/50 portfolio of cash and stock you would need to add more stocks/equity to increase risk because cash is bringing total return down.
What are Indemnity clauses & hold harmless arrangements?
one of the parties to a contract agrees to hold the other harmless and/or indemnify the other in the event of loss.
Target market
one or more specific groups to which an organization aims its marketing program
EXAM
only those 3 things in ch 2 narrowed down legal -apply concepts -go slow think aspects
Exclusions
oral or written conspicious as is had opportunity to inspect/ refused to inspect course of dealing, trade usage
Data
raw unorganized facts
Mutual trust I/R
reduces --risk --decsion uncertianity --belief that partner may act opportunitisitically Increase -- willingness to share info
Customer insights
refer to the collection, deployment, and interpretation of information that allows a business to acquire, develop, and retain its customers. (transforms data into information)
Market research ethics
refers to taking an ethical and above broad approach to conducting market research, does not harm participant
Net return
refers to the total return after deducting fees for management and administration of the investment account (commissions on trades and other that are necessary to generate investment are included)
Gross return
refers to the total return on a security portfolio before deducting fees for management and administration of the investment account (commissions on trades and other that are necessary to generate investment are included)
Regulation
regulation of finance, management, health and safety ****addresses well known instances of market failure
think pair share
relationships move from solo exch to strat partnerships
Mechanical Observation
relies on machies to collect dat a ---> future analysis, TV trackers
Knockout Rule
remove clause they disagree on
Systematic risk a.k.a Beta Risk
risk that affects the entire market or economy and is not diversifiable - priced and earns a return - beta measures the relation between a security's excess returns and the excess returns to the market portfolio
Solvency risk
risk that the entity does not survive or succeed because it runs out of cash to meet its financial obligations
Investors
risk-averse and historical data confirm that financial markets price assets for risk-averse investors
User
role in the buying center is the member of the buying center who actually needs the product
Business ethics
rules of conduct
Heuristics
rules of thumbs used by individuals to arrive at a good decision with less mutual effort Ex; Price equals quality
C4 ratio
sale by the 4 largest firms is more than 50%, market is highly concentrated
slide 2.7
sales conflict
perosnal code of ethics
sales men code, may develop logical unethical decisions through rationalizng --all people do this --no one will ge t hurt --lesser of 2 evils --price one has to pay for being in bsuiness
data scientist
searches through multiple, disparate data sources in order to discover hidden insights that will provide a competitive advantage.
Market penetration strategy
seek to increase sales of existing products to existing markets
respiprocity
spiecal relationship in which two companies agree to buy products from each other...computer for mic --illegal under sherman anti trust law if 1 copany forces the other -must agree willingly
BCG Matrix
stars, question marks, cash cows, dogs
Mission statement
statement of the organizations function in society that often idntifies its customers, markets, products, and technologies
Information Search
step in the consumer decision-making process is a marketer likely to utilize search marketing techniques such as search engine optimization (SEO), sponsored search ads, and shopbots to help consumers find and learn more about their products
stock to utility ratio
stock/supply --------------- utility (consumption demanded)
time utility
storage
physical
storage, processing, transportation
Breadth vs depth of a product line
store carries variety of different items/ store carries large assortment of each item.
Time utility
storing products till they are needed. Ex: Renting wedding gowns instead of buying them at once
SWOT analysis
strenghts, weaknesses, oportunities, threats
relationship selling
strong relationships are a source of C advantage --rentention is important to all companies
institutional
study of the various individuals, agencies, and businesses that perform/affect the marketing process
Representativeness
study similar to large groups in which organizations has an interest.
segment
subgroup share 1 characteristic segmentation
Utility
sum of benefits a consumer receives from product
Scanner data
supermarkets, such as Safeway, have sold data derived from all the items processed at the cash register when consumers check out with their loyalty cards. Which of the following refers to this type of information?
Customer relationship management (CRM)
systematic tracking of consumers' preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individual's unique wants and needs?
Fixed-income arbitrage funds
take opposing positions in debt securities to profit from arbitrage opportunities and to limit interest rate risk.
merchants
take title of commodity
speculators
take title- in market to make profit
marketing
taking commodity from farm to consumers, all institutions and activity involved
export tariffs
taxes applied by the exporting country when a good leaves the country
longitudinal designs
teach change over time, by collecting data from the same sample of respondents overtime
explanatory research (Primary)
technique that marketers use to generate insights for the future, more rigorous studies (indept probing of customers
Focus Group
techniques that market researchers employs most often for for explanatory research
Evaluation of alternatives
tep in the consumer-decision making process will a consumer narrow down choices deciding on feasibility, and comparing the pros and cons of each remaining option
S's remedies on discovery of B insolvency Prior to delivery of goods
the S can: a.W/hold delivery of goods (§ 2-702(1)); OR b. Stop goods already in transit (§ 2-705(1))
market power
the ability to influence prices
absolute advantage
the ability to produce more of a given product using a given amount of resources
comparative
the ad compares one or more alternatives with the advertised product
Price
the amnt the consumer must exchange in order to receive the product or offering. Higher Price=Higher Quality, Markers lower price to increase demand and turn to price to get customer interested.
sales forecast
the amount of a product a company expects to sell during a specific period
Shipment Contract
the buyer bears the risk of loss for the goods prior to actually receiving them. Here, the seller's only duty is to get the goods to a common carrier and make proper delivery arrangements for the goods to get to the seller. After this, under a shipment contract, if any loss occurs the buyer bears the risk of loss and is responsible for the costs. A shipment contract could be identified with language stating it is free on board and the city where the seller is located.
Exchange (Price)
the buyer receives an idea, that satisfies a need and the seller receives something equivalent in value.
E-commerence
the buying or selling of goods and services electronically, usually over the internet
customer portfolio
the collection of mutually exclusive customer groups that comprise a business's entire customer base.
Integrated marketing communication
the concept of designing marking communication programs that coordinate all promotional activities to provide a consistent message across all audiences. Mumble mumble mumble
advertising
the creation and delivery of messages to targeted audiences through the purchase of time or space in media owned by others.
Marketing Decision Support System
the data, analysis, software, and interactive software, and interface software that allows manager to conduct analysis
psychological
the desire for feeling of assurance and risk reduction, as well as positive emotions and feelings such as success, joy, excitement, and stimulation
knowledge
the desire for personal development, information, and knowledge to increase thought and understanding as to how and why things happen
Exposure
the extent to which a person's sensory receptors are capable of registering a stimulus
Reliability
the extent to which research measurement techniques are free of errors.
What is risk tolerance?
the extent to which the entity is willing to experience losses or opportunity costs and to fail meeting its objectives.
Validity
the extent to which the research actually measures what it was intended to measure.
information
the fuel that runs the the marketing engine , marketers must have good information to make good decisions
publicity
the generation of free editorial content relevant to a company's interests.
Franchises
type of license held by a party in order to have access to a business' proprietary knowledge, processes, and trademarks so the party can sell goods/services under the business' name
problem questions
uncover problems, difficulties, or dissatisfactions. Essential to plan these ahead of time otherwise you will remain in Situation Questions
know the multiple attribute model
understanding facotrs inidicatin individ memebers of a buying center consider in evaluating products and making choices ---complex decsions with vendors ---many strsiaght rebuys people view the product as a collection or attributes based off needs
New tasks: P
urchasing a product or service for the first time
Licensing
use home countries production process overseas
who makes buying decision
users gatekeepers initators deciders influencers
internal company data
uses information w/in the organization to produce reports on the results of sales and activities. Ex; Sales Record
positioning
uses marketing communication to place their brand in the minds of their customers in relation to the competition.
Neuromarketing
uses neuro technologies such as EEG and fMRI, and biometric techniques like measuring heart rate to measure brain activity to better understand how and why consumers make the decisions they do.
Predictive technology
uses shopping patterns of large numbers of people to determine which products are likely to be purchased Ex; "those who purchased this item also purchased ..."
Three stages of customer lifecycle
• Customer acquisition • Customer retention • Customer development
rational needs:
•: Performance of the product
Optimum Currency Area
•A collection of countries characterized by well-integrated factor markets, fiscal systems, and economic disturbances that affect each country in a symmetrical manner •A geographical region in which it would maximize economic efficiency to have the entire region share a single currency. 1. Factor markets 2. fiscal policy 3. Similar reaction to external shock
Human Development Index
•A conception of economic development that stresses health, education levels and per capita income
Lorenz Curve
•A graph relating the cumulative percentage of income to the cumulative percentage of households. •Measures inequality
Monetary union
•A group of member countries in a common market all using a common currency
•Ethical perceptions can vary from:
•Country to country •Industry to industry
RELATIONSHIPS WITH THE SALESPERSON'S COMPANy
•Expense accounts - Cover legitimate expenses, such as for travel, accommodation, food etc. •Reporting work-time information and activities - Giving inaccurate information or bending the truth is clearly unethical •Switching jobs •Give ample notice and assist during the transition phase •Do not burn bridges •Do not take anything that belongs to the company
LEGAL ISSUES
•Laws affecting salespeople in the U.S •Statutory law: Based on legislation passed either by state legislatures or by Congress •Uniform Commercial Code: Legal guide to commercial practice in the United States •Administrative laws: Established by local, state, or federal regulatory agencies •Federal Trade Commission is the most active agen Common law: Grows out of court decisions •Precedents set by these decisions fill in the gaps where no laws exist
common goals
•Provide strong incentive to pool strengths and abilities •Help focus on exploiting opportunities •Help sustain the partnership •Effective measuring of goals is critical
Heckscher-Ohlin theorem
A country will export goods that use its abundant factors and import goods that use its scarce factors: capital-abundant and labor-abundant
Millennium Development Goals
A declaration with the goal of improving the living conditions of people in the least developed countries. The goals were: (1) Eradicate extreme poverty and hunger (2) Achieve universal primary education (3) Promote gender equality and empower women (4) Reduce child mortality (5) Improve maternal health (6) Combat HIV/AIDS, malaria, and other diseases (7) Ensure environmental sustainability (8) Develop a global partnership for development. *International declaration improving the living conditions
Quotas
A government-imposed trade restriction that limits the number, or value, of g/s that can be imported or exported during a time period.
Immigration Surplus
Before immigration GDP= a+b+c B+C--> native born workers A--> employers After Immigration ^L = decrease wage rate (Wo--> W1) C--> native born workers E--> immigrant workers A+B+D--> employers GDP= A+B+C+D+E **** B is redistributed from native workers to employers **** D is the Immigration Surplus (not redistributed, not taken from anyone)
ADH Thought Experiment
Compare the labor market outcomes for locations strongly affected by trade with China with locations not strongly affected by trade with China.
Strategy
Complete and contingent plan for playing a game. Strategy has to have one choice for for every information set.
Capital/financial account balance
Difference in payments to and from the country in association with purchases or sales of assets
Current Account Balance
Domestic Savings- Domestic Investment= Balance of Trade (X-M) If savings are greater than investment, there is a BOT Surplus (carries out trade) •Therefore, the country lends the difference to the Rest of the World. This outflow of foreign investment generates a trade surplus. If savings are less than investment, there is a BOT Deficit (receives foreign savings) •The country requires an inflow of foreign savings to make up the difference This inflow of foreign savings finances the trade deficit.
Lower tariff on imported steel would most likely benefit
Domestic consumers of steel
Factors of production
Economic resources used in the production of goods: natural resources, labor, capital Mobile- reallocated easily Specific- cannot be reallocated easily
Change in economic welfare of a country is associated with an increase in tariffs equals
Efficiency Loss - TOT Gain
ADH: What effect to Chinese trade shocks to the local manufacturing sector have on the local non-manufacturing sector (Effect on employment and wages)
Employment stays the same Wages Fall
Imposition of Tariffs will help a nation attain:
Gains for domestic producers
Impossible Trinity
Hypothesis in international economics that it is impossible to have all three of the following at the same time: ▪ A fixed exchange rate ▪ Free capital movement - Freedom to invest and withdraw money ▪ An independent monetary policy - Which is essentially managing inflation A country must pick two out of three. It can fix its exchange rate without emasculating its central bank, but only by maintaining controls on capital flows (like China today); it can leave capital movement free but retain monetary autonomy, but only by letting the exchange rate fluctuate (like Britain--or Canada); or it can choose to leave capital free and stabilize the currency, but only by abandoning any ability to adjust interest rates to fight inflation or recession (like Argentina today, or for that matter most of Europe). In the modern world, given the growth of trade in goods and services, capital controls are easily evaded. In addition, capital controls introduce numerous distortions. Hence, there is virtually no important country which has an effective system of capital control. Under these conditions, the Impossible Trinity asserts that a country has to choose between reducing currency volatility and running a stabilizing monetary policy: it cannot do both.
According to PS which of the following is the most vulnerable industry when US grants PNTR to China
Industry where non-NTR tariff is much higher than the MFN tariff
Convergence criteria of the European Monetary Union
Inflation- no more than 3% higher than the 3 members with the lowest rate Govt. Deficit- no more than 3% of you countries GDP (g-t) Intrest Rate- no more than 2% above the average of 3 members with the lowest inflation rate Exchange rate- Member of ems for 3 years and not devalued Government Debt- no more than 60% of GDP
CLPST: Most vulnerable location when the US grants PNTR to China
Location where workers tend to work in industries where Non-NTR tariff is higher than an MFN tariff
ADHM Voting Behavior:
Locations facing stronger growth in import competition from China see a surge in people voting against the party in that location
ADHM Voting Behavior Part 2:
Locations facing stronger growth in import competition from China see a surge in people voting for Tea Party and Liberty Republicans
Locations that have the highest total tariff according to definition in the NM paper
Locations that heavily specialize in tradable industries have higher tariffs on Mexico prior to NAFTA
HM Slides: Locations that were most vulnerable to NAFTA
Locations that specialize heavily in industries where tariffs on Mexico were high before NAFTA
ADHM Voting Behavior Part 3:
Locations that were republican from 2000 to 2010 and facing stronger growth import competition tend to see different and more conservative Republicans in 2010.
Tariffs
a government tax on imports or exports
-OLI Framework- Internationalization Advantage
all capital stays within the firm, maintains competitive position
Appreciation
an increase in the value of a currency as measured by the amount of foreign currency it can buy
Inter Firm Trade
between two companies
-OLI Framework- Location Advantage
close to final consumers, government policies, transport costs, exploit comparative advantage
Forward Exchange Rate
exchange rate at which a bank agrees to exchange one currency for another at a future date when it enters into a forward contract with an investor.
Effective Exchange Rate
index that describes the relative strength of a currency relative to a basket of other currencies
Structural Change
industrialization (out of date) increase diversity of products urbanization (out of date) geographic expiation of countries markets *** as development proceeds, productive factors move out of lower-productivity activities into higher-productivity activities
Solow residual "growth theory"
number describing empirical productivity growth in an economy from year to year and decade to decade. *** amount of UNEXPLAINED growth in per capita incomes
Rule of law
political representation election civil liberties *** prevents violent conflict and provides legitimacy in political decision making
Real Exchange Rate
real exchange rate tells how much the goods and services in the domestic country can be exchanged for the goods and services in a foreign country
Basel Standards
regulate and supervise banks 1- Proposed regulatory capital requirements of 8% 2- Introduced three pillars of bank regulation (minimum capital requirements, supervisory review, and disclosure for market discipline) and two tiers of capital. Effectively reduced the capital requirement and allowed asset measurements to be risk adjusted by banks' internal models. 3- Improved asset risk adjustment and increased capital requirements to 7%. Not Sucessful!
Asset Price Deflation
the rapid or substantial decline in the value of assets Ex: Asia -burst of real-estate bubble
Gini Coefficient
•A summary measure of the Lorenz curve that gives an overall value to the degree of income inequality. = A/A+B •0 (perfect equality) - 1 (perfect inequality)
Remittances
•Remittances are flows of money from emigrants to their countries of origin •Remittances can have significant and positive impacts in developing countries by directly transferring income more efficiently than foreign aid
GNI
•The value of all final goods and services produced within a countries factors of production (not necessarily within the boarder)
GDP
•Total market value of all final goods & services that are newly produced within boundaries of an economy during a specific amount of time
