Business Explain: October 2017

Archive for October 2017

What is Owner's Equity ?

Answer: The amount of the owner's interest/investment in the business.

What is Liability ?

Answer: An amount owed by a business to an external party.

What is Asset ?

Answer: An item of value owned by a business which will give some future benefit.

What is Expenses ?

Answer: An outflow of resources used to run a business.

What is Revenue ?

Answer: An inflow of resources earned by a business.

What is Accounting ?

Answer: Accounting is the discipline which measures, records and processes financial information about an entity, and interprets and reports that information to interested parties to enable them to make appropriate decisions.

What is Unique Selling Point/ Unique Selling Proposition/ USP ?

Answer: Real or perceived benefit of a good or service that differentiates it from the competing brands and gives its buyer a logical reason to prefer it over other brands.

What is Product Positioning Map ?

Answer: The use of perceptual or positioning maps by firms to help them develop a market positioning strategy for their product or strategy.

What is Marketing Plan ?

Answer: Product specific, market specific, or company-wide plan that describes activities involved in achieving specific marketing objectives within a set timeframe. It includes analysis of the current market situation and detailed action programs, budgets, sales forecasts, strategies, and projected financial statements.

What is Mass Market ?

Answer: Un-segmented market in which products with mass appeal products are offered to every customer through mass retailers or independent stores, and promoted through mass media.

What is Niche Market ?

Answer: Concentrating all marketing efforts on a small but specific and well-defined segment of the of the population.

What is Consumer Profiles ?

Answer: Assembling a database of consumer shopping habits, lifestyles, motivations, preferences, demographics, and psychographics.

What is Target Markets ?

Answer: A particular market segment at which a marketing campaign is focused.

What is Market Segments ?

Answer: An identifiable group of individuals, families, businesses, or organisations, sharing one or more characteristics or needs in an otherwise homogenous market. Market segments generally respond in a predictable manner to a marketing or promotion.

What is Market Leadership ?

Answer: A company that sells the most of a product or service in a particular market, and hence creates a direction for that market.

What is Market Share ?

Answer: A percentage of total sales volume in a market captured by a brand, product, or company.

What is Marketing Mix ?

Answer: A planned mix of the controllable elements of a product's marketing plan commonly termed as 4 P's:

Product,
Price,
Place and
Promotion.

These four elements are adjusted until the right combination is found that serves the needs of the product's customers, while generating optimum income.

What is Social Marketing ?

Answer: Application of commercial marketing concepts, knowledge, and techniques to non-commercial ends (such as campaigns against smoking and drunken driving) for the society's welfare.

What is Commercial Marketing ?

Answer: The sale of products and services to end-users, and, public and private companies, but not to governmental agencies.

What is Product Orientation ?

Answer: Business approach in which whatever a company makes or supplies is the focus of the management's attention.

What is Market Orientation ?

Answer: Identification and meeting of the stated or hidden needs or wants of customers.

What is Marketing ?

Answer:

Activities employed by a company to advertise, sell and deliver products to people.

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.

What is Marketing ?

Answer: Activities employed by a company to advertise, sell and deliver products to people.

What is Hierarchical organizations ?

Hierarchical organizations is an organizational structure where every entity in the organization, except one, is subordinate to a single other entity. This arrangement is a form of a hierarchy.

What is Tall/vertical organizations ?

Tall/vertical organizations is one that has a pyramid-look when charted out on paper. At the top is the company president or chief executive officer, and then each division is made up of a series of middle management and supervisors who are responsible for various departments.

What is Flat/horizontal organizations ?

also known as horizontal organization or de-layering has an organizational structure with few or no levels of middle management between staff and executives.

What is Organization charts ?

A graphic representation of the structure of an organization showing the relationships of the positions or jobs within it.

What is Delayering ?

To reduce the size of a business hierarchy, especially in terms of a reduction in management. This creates a flatter (less layered) organizational structure.

What is Decentralization ?

Transfer of decision making power and assignment of accountability and responsibility for results.

What is Centralization ?

1.The concentration of management and decision-making power at the top of an organization's hierarchy.

2.The location of all or most main departments and managers at one facility.

What is Bureaucracy ?

A system of administration distinguished by its

(1) clear hierarchy of authority,
(2) rigid division of labor,
(3) written and inflexible rules, regulations, and procedures, and
(4) impersonal relationships.

What is Levels of hierarchy ?

A ranking pyramid of ideas, individuals, items, etc., where every level (except the top and the bottom ones) has one higher and one lower neighbor. Higher level means greater authority, importance, and influence.

What is Span of control ?

The number of subordinates that a manager or supervisor can directly control. This number varies with the type of work

What is Delegation ?

General: Grant of authority by one party (the delegator) to another (the delgatee) for agreed purpose(s).

What is Variable Costs ?

Answer: Expenses that are tied to the sale of each unit, primarily direct labor and materials costs (aka Cost of Goods Sold).

What is Period Costs ?

Answer: Costs that are not tied directly to the cost of producing a unit. Examples include administration, salespeople, managers, and depreciation.

What is Leverage ?

Answer: Total Assets ÷ Total Equity. Leverage provides insights into a company's Financial Structure. It is a measure of risk for investors and creditors. Investors like high leverage, creditors like low leverage. For the simulation the ideal range for leverage is greater than 1.8 and less than 2.8.

What is Balance Sheet ?

Answer: A snapshot of company's financial position. The equation is Assets = Liabilities + Owners' Equity. The "left side" (Assets) shows what the company owns. The "right side" (Liabilities and Owners' Equity) shows who paid for the Assets.

What is Forecasting ?

Answer: The art and science of predicting demand such that you supply adequate products to satisfy demand and yet not accumulate excess inventory.

What is Emergency Loans ?

Answer: A loan automatically given in the simulation when a company runs out of cash. In the real world, emergency loans do not exist. When you run out of cash, you have a "Liquidity Crisis," "Chapter 11," or "Bankruptcy" on your hands.

What are inbound logistics, outbound logistics, and reverse logistics?

Answer: Inbound logistics brings raw materials, packaging, other goods and services, and information from suppliers to producers. Materials handling is the moving of goods from the warehouse to the factory floor and to various workstations. Outbound logistics manages the flow of finished products and information to business buyers and ultimate consumers. Reverse logistics brings goods back to the manufacturer because of defects or for recycling materials.

How does logistics differ from distribution?

Answer: Distribution generally means transportation. Logistics is more complex, and includes 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.

What four systems have evolved to tie together members of the channel of distribution?

Answer: The four systems that have evolved to tie together members of the channel of distribution are;

Corporate systems in which all organizations in the channel are owned by one firm.
Contractual systems, in which members are bound to cooperate through contractual agreements.
Administered systems, in which all marketing functions at the retail level are managed by manufacturers.
Supply chains, in which the various firms in the supply chain are linked electronically to provide the most efficient movement of information and goods possible.

What kinds of products would call for each of the different distribution strategies; intensive, selective, exclusive?

Products that need intensive distribution include convenience goods such as candy, gum, and popular magazines.
Selective distribution products- manufacturers of appliances, furniture, and clothing (shopping goods) use selective distribution.
Exclusive distribution appeal to luxury auto manufacturers, as well as producers of specialty goods.

Why do we need intermediaries? Illustrate how intermediaries create exchange efficiency.

Answer: We need intermediaries perform certain task such as, transporting, storing, selling, advertising, and relationship building-faster and more cheaply than most manufacturers could. An illustration of how intermediaries crate exchange efficiency is when a wholesaler enters the system. If there are five manufacturers then each contact the wholesaler, establishing five exchange relationships. The wholesaler then establishes contact with the five retailers, creating five more exchange relationships. Thus the wholesaler's existence reduces the number of exchange from 25 to only 10.