Business Dynamics Final Exam, Chapters: 1,3,7,13, 15-19, Bonus Chapter B

full-service wholesalers

merchant wholesalers that perform all the distribution functions

limited-function wholesalers

merchant wholesalers that provide only some wholesaling functions

today's new era of marketing

mobile/on-demand marketing

Revenues

money generated from products sold or services rendered. "TOP LINE"

Expenses

money outflow from the costs associated with selling products or services

Liquidity

the ease with which an asset can be converted into cash

maturity date

the exact date the issuer of a bond must pay the principal to the bondholder

principal

the face value of a bond

Cash flow forecast

Predicts the cash inflows and outflows in future periods, usually months or quarters.

Trade Surplus (Favorable)

When the value of a country's exports is more than that of its imports.

direct marketing

activities that directly link manufacturers or intermediaries with the ultimate consumer.

independent audit

an evaluation and unbiased opinion about the accuracy of a company's financial statements

consumer sales promotion

free samples, coupons, contests, and demonstrations to consumers

Export Trading Companies

help companies with INDIRECT exporting by negotiating and establishing trading relationships.

Issuing Stock

helps balance sheet by creating no debt

What is happening to social security?

# of workers per retiree is falling.

strategic alliance

(2nd most risky) a long-term partnership between two or more companies established to help each company build competitive market advantages. - they don't typically share costs, risks, management, or profits. - provide access to markets, capital, and tech expertise.

Joint Ventures

(2nd most risky) a partnership in which two or more companies (often from different countries) join to undertake a major project. - shared risk&tech - shared marketing/expertise

multinational corporation

(example of FDI) an organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management.

Foreign Direct Investment (FDI)

(most risky) the buying of permanent property and businesses in foreign nations

Contracting Manufacturing

(upper-mid risk) a foreign company's production of private-label goods to which a domestic company then attaches its brand name or trademark; part of the broad category of outsourcing - APPLE w/ Foxconn

factors that influence product pricing

- competitors' prices - production costs - distribution - promotion

Rack jobbers (limited-function)

- furnishes racks or shelves full or merchandise to retailers, display products, and sell consignment. (like coke shelf at a supermarket)

Cons of offshore outsourcing

- jobs may be lost permanently and wages fall due to low-cost competition offshore - offshore outsourcing may reduce product quality and can therefore cause permanent damage to a company's reputation - communication among company members, with suppliers, and with customers becomes much more difficult

Pros of offshore outsourcing

- less-strategic tasks can be outsourced globally so that companies can focus on areas in which they can excel and grow - outsourced work allows companies to create efficiencies that in fact let them hire more workers - consumers benefit from lower prices generated by effective use of global resources and developing nations grow, thus fueling global economic growth

Nonprofit marketing tactics include:

-Fundraising -advertisements -creating awareness

How do we restore trust in the free-market system?

-punish those who have broken the law -make accounting records more transparent -consider what is ethical, not just what is legal

cons of free trade

1) domestic workers (particularly in manufacturing based jobs) can lose their jobs due to increased imports or productions shifts to low-wage global markets 2) workers may be forced to accept pay cuts from employers, who can threaten to move their jobs to lower-cost global markets 3) moving operations overseas because of intense competitive pressure often means the loss of service jobs and growing numbers of white-collar jobs 4) domestic companies can lose their comparative advantage when competitors build advanced production operations in low-wage countries

pros of free trade

1) the global market contains over 6 billion potential customers for goods and services 2) productivity grows when countries produce goods and services in which they have a comparative advantage 3) global competition and less-costly imports keep prices down, so inflation does not curtail economic growth 3) free trade inspires innovation for new products and keeps firms competitively challenged 4) uninterrupted flow of capital gives countries access to foreign investments, which help keep interest rates low

5 factors of production

1. Land (natural resources) 2. Labor (physical or mental) 3. Capital (machinery, tools) 4. Entrepreneurship (initiative, risk) 5. Knowledge Entrepreneurship + Knowledge are what make countries rich.

4 eras of marketing

1. Production 2. Selling 3. Marketing Concept 4. Customer Relationship

prospectus

A condensed version of economic and financial information that a company must file with the SEC before issuing stock; the prospectus must be sent to prospective investors.

Franchising

A contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor.

Income Statement

A financial statement that reports a company's revenues and expenses and resulting net income or net loss for a specific period of time. They are temporary.

Balance Sheet

A financial statement that reports assets, liabilities, and owner's equity on a specific date. It is a permanent account.

prospect

A person with the means to buy a product, the authority to buy, and the willingness to listen to a sales message.

offshore outsourcing

A process by which a firm moves some of its work to a secondary business outside the home country that can do the work more efficiently or cheaply

Bond Ratings

A rating assigned to a firm to measure the probability of default by a company like S&P or Moody's.

stockbroker

A registered representative who works as a market intermediary to buy and sell securities for clients.

sinking fund

A reserve account in which the issuer of a bond periodically retires some part of the bond principal prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond.

focus group

A small group of people who meet under the direction of a discussion leader to communicate opinions.

Ledger

A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place.

channel of distribution

A whole set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers.

place utility

Adding value to products by having them where people want them. - 7-Eleven is in convenient locations.

Time Utility

Adding value to products by making them available when they're needed. -grocery stores are open 24h

Information Utility

Adding value to products by opening two-way flows of information between marketing participants. - newspapers, libraries, and websites.

Stakeholders

All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address.

NAFTA (North American Free Trade Agreement)

Allows open trade between the US, Mexico, and Canada. Made to boost growth in jobs, fight poverty, and close the wage gap (LARGELY FAILED)

World Trade Organization (WTO)

An independent entity of 164 member nations whose purpose is to oversee cross-border trade issues and global business practices; headquartered in Geneva.

retailer

An intermediary who sells to consumers

publicity

Any information about an individual, product, or organization that's distributed to the public through the media and that's not paid for or controlled by the seller. -free -reaches people who would not look at an ad. -may be more believable than advertising. CONS: it can be god or bad, it is not likely to run again, and no control over when media will release a story.

Fundamental Accounting Equation

Assets = Liabilities + Owner's Equity

3 main sections of balance sheet

Assets, Liabilities, and Shareholders' Equity

B2B Marketing v Consumer Marketing Strategies

B2B marketing is more a logical approach as these products are resold over and over. Business buyers have their own decision-making process. Consumer marketing is for personal consumption and a more emotional attachment and different decision-making process is used.

3 key financial statements of financial accounting

Balance Sheet, Income Statement, Statement of Cash Flows

Culture

Beliefs, customs, and traditions of a specific group of people.

Advantages of Issuing Bonds

Bondholders are creditors, not owners of the firm and can't vote on corporate matters. Bond interest is tax deductible. Bonds are a temporary source of funding and are eventually repaid. Bonds can be repaid before the maturity date if they contain a call provision.

disadvantages of issuing bonds

Bonds increase debt and can affect the market's perception of the firm. Paying interest on bonds is a legal obligation. If interest isn't paid, bondholders can take legal action. The face value of the bond must be repaid on the maturity date.

competitive environment

Businesses compete by exceeding customer expectations through great products with low prices and by restructuring and empowering employees with responsibility and authority

Diversification

Buying several different types of investments to spread the risk of investing. Investors decrease the chance of losing everything.

The Emerging Mobile/On-Demand Marketing Era

Consumers want to interact anywhere, anytime in new ways that create value for them. Consumers expect personalized experiences. Consumers expect all interactions to be easy.

Ethnocentricity

an attitude that your own culture is superior to other cultures

Possession Utility

Doing whatever is necessary to transfer ownership from one party to another, including providing credit, delivery, installation, guarantees, and follow-up service.

Low value of the dollar

Dollar is trading for less foreign currency; foreign goods are more expensive

High value of the dollar

Dollar is trading for more foreign currency; foreign goods are less expensive.

Value of U.S currency has generally trended in what direction?

Downward

Common markets/Economic unions

Eliminated all tariffs and other restrictions on internal trade, adopts set of common external tariffs and is a regional group of countries with a coordination f laws to facilitate exchange. (EU. ASEAN)

cash budget

Estimates cash inflows and outflows during a particular period like a month or quarter.

stock certificate

Evidence of stock ownership that specifies the name of the company, the number of shares it represents, and the type of stock being issued.

Insourcing

Foreign companies opening offices and factories in the United States.

global environment

Globalization has grown due to efficient distribution systems and communication systems such as the Internet.

Economic and Legal Environment

Government can promote entrepreneurship by; 1. Allowing private ownership of businesses. 2. Minimizing interference with the free exchange of goods and services. 3. Passing laws that enable businesspeople to write enforceable contracts. 4. Establishing a currency that's tradable in world markets. 5. Minimizing corruption.

Export Assistance Centers (EACs)

Help SMALL and MEDIUM sized businesses with direct exporting by providing exporting assistance and trade-finance support.

What age of business are we in?

Information Age, where a significant portion of a company's value is based on its intellectual capital.

bulls

Investors who believe stock prices are going to rise

Bears

Investors who expect stock prices to decline

relationship marketing

Keeping individual customers over time by offering them products that exactly meet their requirements. (more custom made goods)

Licensing

LEAST RISKY global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty). - allows firm to benefit via gaining revenues it would not have otherwise generated. - spending little or no money to produce or market their products. (think Smash) Microsoft is the licensor to the licensee which is nintendo when putting steve from minecraft into smash bros. The licensee, Nintendo has to pay Microsoft a royalty fee for steve.

institutional investors

Large organizations - such as pension funds, mutual funds, and insurance companies - that invest their own funds or the funds of others.

Customer Relationship Management (CRM)

Learning as much as possible about customers and doing everything you can to satisfy or exceed their expectations.

marketing intermediaries

Organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C). They're in the middle of a series of firms that distribute goods. Perform marketing tasks cheaper and faster (transporting, selling, storing, and relationship building. By doing this they add value which exceeds cost.

word of mouth

People tell others about products they have purchased. - entertainers, banners, attention-getting devices, clever commercials, testimonials are effective.

Marketing Mix (4 P's)

Product, Price, Place, Promotion

Product Placement

Putting products into TV shows and movies where they will be seen

global advertising

Requires marketers to develop a single product and promotional strategy to implement worldwide. Problems can arise in global markets with using one advertising campaign in all countries-especially bad translations.

warehouse club

Sells food and general merchandise in facilities that are usually larger than supermarkets and offer discount prices; membership may be required (Costco)

convenience store

Sells food and other often-needed items at convenient locations; may stay open all night (7-Eleven)

budget

Sets forth management's expectations for revenues and allocates the use of specific resources throughout the firm. - depends heavily on the balance sheet, income statement, statement of cash flows, and short-term/long-term financial forecasts.

service industry

Since the mid-1980s, it has generated almost all the increases in employment

Generally Accepted Accounting Principles (GAAP)**

Standard framework of guidelines for financial accounting used in any given jurisdiction; aka Accounting Standards followed.

preferred stock

Stock that gives its owners preference in the payment of dividends and an earlier claim on assets than common stockholders if the company is forced out of business and its assets sold. Do NOT have voting rights. -callable -convertible -cumulative

promotion mix

The combination of promotional tools an organization uses. Advertising, personal selling, sales promotion, and public relations which surround a product.

Initial Public Offering (IPO)

The first public offering of a corporation's stock.

Public Relations

The management function that evaluates public attitudes, changes policies and procedures in response to the public's requests, and executes a program of action and information to earn public understanding and acceptance. -listen to public -change policies and procedures -inform people you are responsive to their needs.

materials handling

The movement of goods within a warehouse, from warehouses to the factory floor, and from the factory floor to various workstations.

capital gains

The positive difference between the purchase price of a stock and its sale price.

Investment Risk

The possibility that an investment will fail to pay the expected return or fail to pay a return at all

Supply Chain Management

The process of managing the movement of raw materials, parts, work in progress, finished goods, and related information through all the organizations involved in the supply chain; managing the return of such goods, if necessary; and recycling materials when appropriate.

sales promotion

The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.

Pipeline Transportation

This method of transportation is usually owned by the company that uses them. The commonly transport oil and natural gas.

operating budget

Ties together all the firm's other budgets and summarizes its proposed financial activities.

Foreign Corrupt Practices Act

U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.

Trade Deficit (Unfavorable)

When the value of a country's exports is less than that of its imports.

promissory note

a agreement with a promise to pay a supplier a specifc sum of money at a definite time./

capital budget

a budget that highlights a firm's spending plans for major asset purchases that often require large sums of money

foreign subsidiary

a company owned in a foreign country by another company, called the parent company. This is an example of an FDI. parent company has full control over its tech or expertise. primary disadvantage is that it must commit fund/tech within foreign boundaries.

Countertrading

a complex form of bartering in which several countries may be involved, each trading goods for goods or services for services

bond

a corporate certificate indicating that a person has lent money to a firm (or a government)

absolute advantage

a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.

comparative advantage

a country should sell to other countries those products it produced most efficiently and buy from other countries those products that it cannot produce as effectively or efficiently.

corporate distribution system

a distribution system in which all of the organizations in the channel of distribution are OWNED by one firm

contractual distribution system

a distribution system in which members are bound to cooperate through contractual agreements. - franchise systems - wholesale-sponsored chains - retail cooperatives

administered distribution system

a distribution system in which producers MANAGE all of the marketing functions at the retail level

social commerce

a form of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services

informercial

a full-length TV program devoted exclusively to promoting a good or service.

import quota

a limit on the number of products in certain categories that a nation can import

Exporting

a little more risk than licensing.

wholesaler

a marketing intermediary that sells to other organizations. Normally make B2B sales, but also have some retail functions.

over the counter market

a network of dealers who buy and sell the stocks of corporations that are not listed on a securities exchange

entrepreneuer

a person who risks time and money to start and manage a business.

financial control

a process in which a firm periodically compares its actual revenues, costs, and expenses with its budget, Identifies variances to the financial plan and makes moves to take corrective action.

Outsourcing

a response to variety of stakeholders: contracting with other companies in other countries to do some functions of a firm.

Trial Balance

a summary of all the financial data in the account ledgers that ensures the figures are correct and balanced

Integrated Marketing Communications

a technique that combines all the promotional tools into one comprehensive, unified promotional strategy. It is used to create a positive brand image/meet the needs of consumers

brand name

a word, letter, or group of words or letters that differentiates one seller's goods and services from those of competitors

annual report

a yearly statement of the financial condition, progress, and expectations of an organization

service utility

adding value by providing fast, friendly service during and after the sale and by teaching customers how to best use products over time

newspaper

advantage: good coverage of local markets and high consumer acceptance disadvantage: poor color and short life span

television

advantage: reaches all audiences and uses sight and sound. disadvantage: high cost, have to compete with on-demand services/media as you can't skip ads on TV.

online advertising

advertising that appears while consumers are browsing online, including display ads, search-related ads, online classifieds, and other forms

General Agreement on Tariffs and Trade (GATT)

agreement that established an international forum for negotiating mutual reductions in trade restrictions.

Consumer Market

all the individuals and households that buy goods/ services for PERSONAL CONSUMPTION

business-to-business market (B2B)

all the individuals and organizations that want goods and services to use in producing other goods and services or to sell. rent, or supply goods to others. B2B marketers - manufacturers - retailers - schools, nonprofit - government

promotion

all the techniques sellers use to inform people about and motivate them to buy their products or services. -advertisements -public relations -word of mouth -sales promotions

promotion

all the techniques sellers use to motivate people to buy their products or services.

convertible bonds

allow bondholders to convert their bonds into shares of common stock

blogging

allows companies to interact with consumers and can attract new customers.

profit

amount of money a business earns above and beyond what it spends for salaries and other expenses.

Embargo

an official ban on trade or other commercial activity with a particular country. Occur due to political disagreements.

nonprofit organization

an organization whose goals do not include making a personal profit for its owners or organizers. They use financial gains to meet social or educational goals.

stock exchange

an organization whose members can buy and sell securities on behalf of companies and individual investors

Marketing Research

analysis of markets to determine OPPORTUNITIES and CHALLENGES to find info needed to make good decisions. Critical to understand consumer wants and needs. - used to identify products consumers have used in the past and what they want in the future.

Key Benefits of Marketing Research

analyze: -customer needs and satisfaction -current markets and opportunities -the effectiveness of marketing strategies -marketing process and tactics currently used -reasons for goal achievement or failure

business

any activity that seeks to provide goods and services to others while operating at a profit.

product

any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of the consumers.

secured bonds

bonds that are backed by specific collateral like land/equipment that must be forfeited in the event that the issuing firm defaults

Importing

buying products from another country

cash flows from operating activities

cash inflows and outflows directly related to earnings from normal operations

cash flows from financing activities

cash inflows and outflows related to external sources of financing (owners and creditors) for the enterprise. Raising and returning capital from institutional sources.

cash flows from investing activities

cash inflows and outflows related to the acquisition or sale of productive facilities and investments in the securities of other companies

CPA

certified public accountant

Form Utility

changing raw materials into usable goods. baking a cake

high quality of life is determined by

combined efforts of businesses, nonprofits, and government agencies.

storage

companies must ha e goods available in various parts of the country ready to be shipped locally when ordered.

Tech in Accounting

computerized accounting programs post info instantly and from remote locations. - QuickBooks for ex, address the specific needs of small businesses.

Global trade enables

countries to produce what they make best and buy what they need from others.

Dodd-Frank Wall Street Reform Act

created a new consumer watchdog to prevent mortgage companies and payday lenders from exploiting consumers

Sarbanes-Oxley Act

created new govt. reporting standards for publicly traded companies and the Public Company Accounting Oversight Board (PCAOB). - prohibits accounting firms from providing non-audit work like consulting to companies they audit.

floating exchange rate

currencies float in value depending on the supply and demand for them in the global market. Creates transaction risk.

3 parts of marketing concept

customer orientation, service orientation, profit orientation

unsecured bonds

debentures, or bonds that are not backed by specific collateral

Sources of Funds

debt financing and equity financing

Liabilities

debts of the business. Amounts owed to creditors such as banks and employees. Current and non-current.

one-to-one marketing

developing a unique mix of goods and services for each individual customer

mass marketing

developing products and promotions to please large groups of people. (uses little market segmentation)

#1 medium for advertising

digital media

B2B sales promotion

displays, trade shows, exhibitions, event sponsorships and contests.

demographic segmentation

dividing the market by age, income, and education level

geographic segmentation

dividing the market by cities, states, counties, or regions.

benefit segmentation

dividing the market by determining which benefits of the product to talk about

Volume

dividing the market by usage (volume of use)

Psychographic segmentation

dividing the market using groups' values, attitudes, and interests

Market Segmentation

dividing the total market into groups whose members have similar characteristics

Effect of War and Terrorism

drained trillions from U.S economy, money diverted to the war effort, and adds to cost of insurance/security.

Technological Environment

everything from phones to computers and the various software programs that make business processes more effective, efficient, and productive.

Niche Marketing

finding small but profitable market segments and designing or finding products for them

look at figure

for industrial

Size and diversity of markets

forces marketers to decide which groups they want to serve.

operating funds

funds needed to keep the doors to the firm open and in business

debt financing

funds raised through various forms of borrowing that must be repaid

Agents

generally maintain long-term relationships with the clients they represent.

Sovereign Wealth Funds (SWFs)

government owned investment funds holding large stakes in foreign companies

Trains

great for large shipments

primary market

handle the sale of new securities

secondary market

handle the trading of securities between investors with the proceeds of the sale going to the seller

what made large-scale farming successful?

harvester and cotton gin (led to fewer farmers and large farms)

pull strategy

heavy advertising and sales promotion efforts are directed toward consumers so that they'll request the products from retailers

Protective Tariff

import taxes

e-mail promotion

increase brand awareness. Update

merchant wholesalers

independently owned firms that take title to the goods they handle. 2 types: limited-function and full service.

primary data

information YOU collected for the specific purpose at hand

secondary data

information that already exists somewhere, having been collected for another purpose. Incurs no expense and is easily accessible (should be the first data you look for)

Accounting System Components**

inputs such as accounting documents, processing in journals, and outputs such as balance sheets, income statements, and cash flow statements.

services

intangible products - education, health care, insurance, recreation

Consumer Behavior

investigating consumer thought processes at each stage of a purchase to determine the best way to help the consumer.

5 criteria

investment risk, yield, duration, liquidity, and tax consequences.

reverse logistics

involves bringing goods back to the manufacturer because of defects or for recycling materials

inbound logistics

involves bringing raw materials, packaging, other goods and services, and information from suppliers to producers

outbound logistics

involves managing the flow of finished products and information to business buyers and ultimate consumers

Water Transportation

is inexpensive but slow

How much more expensive is the cost of acquiring a new customer compared to the cost of retaining one?

it is 5 times more expensive to acquire a new customer.

Industrialization in 19th and 20th century led to

jobs moving from farms to factories

Physical and Environmental Forces

limited transportation and storage systems that make international distribution difficult. (common in developing countries)

Devaluation

lowering the value of a nation's currency relative to other currencies

qualifying

making sure that people have a need for the product, the authority to buy, and the willingness to listen to a sales message

common channel for food items such as produce

manufacturer, broker, wholesaler, retailer

viral marketing

marketing activities that aim to increase brand awareness or sales by consumers passing a message along to other consumers

Target Market

marketing directed toward those groups and organization decides it can serve profitably.

agents and brokers

marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods. (type of intermediary) - A real estate agent

equity financing

money raised from within the firm, from operations or through the sale of ownership in the firm (stock or venture capital)

time value

money today is worth more than money in the future.

international accounting issues

multinational companies must adapt their accounting reporting to other country standards.

social environment

must manage diversity by being inclusive in the workplace and keeping up with social issues.

Financial Management

must pay company's bills and collecting payments. their functions are critical to small and medium-sized business. Must stay abreast of changes or opportunities in finances such as changes in tax law. - must be aware of market predictability, interest rates, cyberthreats, regulations, volatility of the dollar.

Net Income

net earnings/profit "bottom" line.

gains

net money inflows from transactions that are not part of normal operations.

Losses

net money outflows from transactions that are not part of normal operations.

Legal Forces

no global system of laws and can be inconsistent. Organization for Economic Cooperation and Development and Transparency International fight to end corruption and bribery in foreign markets and have had limited success.

online trading services

offer securities trading services online to buy and sell stocks and bonds.

Stockholders

owners of a firm who never have to be repaid of their investment. Have the right to vote for a company's board of directors. Issuing new shares of stock can alter control of the firm.

Shareholders' Equity

owners' claim on the net assets of the business. Consists primarily of contributed capital and retained earnings.

Advertising

paid non personal communication about an organization and its products transmitted to a target audience through mass media

Dividends

part of a firm's profits that the firm MAY distribute to stockholders as either cash payments or additional shares of stock. (not required to distribute)

Intermediaries/middlemen

perform the critical step of getting a product to consumers at a place and a time.

callable bonds

permit bond issuers to pay off the principal before the maturity date

environmental scanning

process of identifying the factors affecting marketing success. can be: global factors tech factors sociocultural factors competitive factors economic factors

U.S. Equal Employment Opportunity Commission (EEOC)

prohibits laws discriminating against age, disability, genetic info, national origin, race, pregnancy, religion, and sex.

buying stock on margin

purchasing stocks by borrowing some of the purchase cost from the brokerage firm. Margin is the portion of the stock's purchase price that the investor must pay with their own money. If a broker issues a margin call, the investor has to come up with money to cover losses.

intensive distribution

puts products into as many retail outlets as possible. Can be very expensive but more exposure.

Prospecting

researching potential buyers and choosing those most likely to buy

Assets

resources owned or controlled by the corporation that will provide a future benefit. Current and non-current.

wholesale sales

sales of goods and services to other businesses for use in the business or resale

online retailing

selling goods and services to ultimate customers over the internet. Online stores sometimes suffer lack of inventory and poor customer service.

Dumping

selling products in a foreign country at lower prices than those charged in the producing country. (prohibited in U.S)

Exporting

selling products to another country

direct selling

selling to consumers in their homes or where they work

category killer

sells a huge variety of one type of product to dominate that category of goods (bass pro)

specialty store

sells a wide selection of goods in one category (jewelry stores/ bicycle stores)

department store

sells a wide variety of products in separate departments

outlet store

sells general merchandise directly from the manufacturer at a discount; items may be discontinued or have flaws (nordstrom rack)

discount store

sells many different products at prices generally below those of department stores

supermarket

sells mostly food with other nonfood products such as detergent and paper products

selective distribution

sends products to only a preferred group of retailers in an area

exclusive disribution

sends products to only one retail outlet in a given geographic area. (super high quality products that people are willing to go to one place to buy that)

cash-and-carry wholesalers (limited-function)

serve mostly smaller retailers with a limited assortment of products

The forces that affect trading in global markets.

sociocultural forces, economic and financial forces, legal and regulatory forces, and physical and environmental forces

investment bankers

specialists who assist in the issue and sale of new securities. Intermediaries that take a fraction of the transaction that they do.

Statement of Cash Flows

start with beginning balance of cash, then followed by 3 sections.

Radio Frequency Identification (RFID)

tags keep track of goods.

goods

tangible products such as computers, food, clothing, cars, and appliances.

revenue tariff

tax on imports used primarily to raise government revenue without restricting imports

tarrifs

taxes imposed on imports.

countries with abundant natural resources need

technological resources from other countries

test marketing

testing products among potential users

Marketing

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Mutually beneficial exchange between buyers and sellers.

What led economic development in the 1800's?

the agricultural industry led economic development

standard of living

the amount of goods and services people can buy with the money they have. The U.S has one of the highest standards of living in the world.

Productivity

the amount of output you generate given the amount of input

yield

the annual rate of return on a bond if the bond were held to maturity

Form 10-K

the annual report that publicly traded companies must file with the SEC

e-commerce

the buying and selling of goods over the internet. Enables B2B and B2C commerce.

risk

the chance an entrepreneur takes of losing time and money on a business that may not prove profitable.

balance of payments

the difference between the flow of money into (exports) and out of a country (imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investments.

personal selling

the face-to-face presentation and promotion of goods and services. Salespeople need to listen to customer needs, help reach a solution, and do everything possible to make the transaction as simple as possible.

Securities and Exchange Commission (SEC)

the federal agency that has responsibility for regulating the various stock exchanges. Created in 1934 through the Securities and Exchange Act. Established guidelines to prevent insider trading.

Quality of Life

the general well-being of a society in terms of its political freedom, natural environment, education, leisure amount, safety, and rewards that add to the satisfaction and joy that other goods and services provide.

Auditing

the job of reviewing and evaluating the information used to prepare a company's financial statements. Examine the operational effectiveness and efficiency of a business as well

Logistics

the marketing activity that involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.

securities markets

the marketplace in which stocks, bonds, and other financial instruments are traded. 2 primary functions: Assist businesses in finding long term funding to finance capital needs. Provides private investors a place to buy and sell.

tax accounting*

the means by which management determines the amount of taxes that a company owes, how to legally reduce those taxes, and analyzes the impact of business decisions on taxes.

Financial Accounting*

the means by which management provides information that assist EXTERNAL parties in making decisions about the company.

Managerial Accounting*

the means by which management provides information that assist INTERNAL parties in making decisions about the company.

common stock

the most basic form of ownership, including voting rights and the right to share

free trade

the movement of goods and services among nations without political or economic barriers.

climate change

the movement of the temperature of the planet up or down over time

interest rate

the payment the issuer makes to the bondholders for use of the borrowed money. Sometimes called the coupon rate (for bonds). - can vary, depending on the government's rates, the economy, the reputation of the issuing company, and other companies' rates.

trade credit

the practice of buying goods and services now and paying for them later

push strategy

the producer uses advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise

telemarketing

the sale of goods and services by telephone. Used by companies to supplement/replace in-store selling and complement online selling.

retail sales

the sales of durable and nondurable goods bought by consumers

nonstore retailing

the selling of products outside the confines of a retail facility. Vending machines, kiosks, carts, and pop-ups.

Supply Chains

the sequence of linked activities that must be performed by various organizations to move goods from the sources of raw materials to ultimate consumers

Greening

the trend toward saving energy and producing products that cause less harm to the environment

Best segmentation strategy

use all the variables to come up with a consumer profile that represents a sizable, reachable, and profitable target market

trade protectionism

the use of government regulations to limit the import of goods and services. Allows domestic producers to survive, grow, and produce jobs.

third party logistics

the use of outside firms to help move goods from here to there

exchange rate

the value of a currency in one country relative to the currencies of other countries

revenue

total amount of money a business takes in during a given period by selling goods and services.

balance of trade

total value of a nation's exports compared to its imports over a particular period.

United States-Mexico-Canada Agreement (USMCA)

trade treaty among the United States, Canada, and Mexico to lower and eliminate tariffs among the three countries. Made to replace NAFTA.

Motor vehicles

trucks and cars most commonly used transport system

Reasons Business Fail FINANCIALLY

undercapitalization poor control over a cash flow inadequate expense control

multilevel marketing

uses salespeople who work as independent contractors

Brokers

usually represent clients on a temporary basis

loss

when a business's expenses are more than its revenues.

drop shippers (limited-function)

wholesalers that solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer

What makes the global market appealing?

world population of 7.7 billion makes it a huge market of potential customers.

Social Media Advertising

•Companies can measure how many times a post is viewed or shared. •Social media allows marketers to test promotions before bringing them to traditional media.

business to consumer sales process

•Most of these sales take place in retail stores. •The salesperson does not have to do much prospecting or qualifying. •Retail salespeople don't usually need a preapproach step. •Follow up if the product is to be delivered or installed.