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.