Comm-101-study-1 - Study Notes for Ken Hackney intro to business class

Comm-101-study-1 about:blank 1/31 Comm 101 Chapter 1  Business – organization that strives for a profit by providing goods and services desired by consumers  Goods – tangible items manufactured by businesses  Services – intangible offerings of businesses that cant be touched or stored  Standard of living – country’s output of goods and services that people can buy with money they have  Quality of life – general level of human happiness based o life expectancy, educational standards, sanitation and leisure time  Risk – Potential for losing resources, most commonly money and time  Revenue – the money a company earns from providing services or selling goods  Costs – expenses incurred in creating and selling goods/services  Profit – money left over after all expenses are paid  Non-for-profit organization – an organization that achieves to achieve social goals or goals  Authority of federal gov’t – Money & banking, trade regulation, external relations, defense, criminal law, transportation  Provincial Gov’t Authority (protecting rights) – administration of labour laws, education, health/welfare, natural resources, protection of property and civil rights, Environment  Municipal Govt’s (delivering the services) – water, sewer, waste collection, encourage economic development, use bylaws to regulate  Protecting consumers – right of choice, safety, honesty, to be informed  Future of politics & gov’t roles – increasing interests and investments in clean technology projects, increase need for skilled labour, govt’s expect more transparency in marketing, operations, and corporate responsibility  Transfer payments – payments made to provinces/territories by federal govt to deliver services like heath and education and equalize wealth across Canada  Patent – form of protection established by govt for inventors, giving inventor exclusive rights to manufacture, use, and sell invention for 20 years  Copyright – established by govt for art, music, literature. Use for creators life time + 50 years after  Trademark – legally exclusive design, name or mark used to identify product  Bankruptcy – legal procedure by which individual/business cannot meet financial obligation  Deregulation – removal of rules/regulations governing business competition  Tort – civil or private act that harms other people or property  Consumerism – movement that seeks to increase the rights/powers of buyers vis-à-vis sellers o Sellers rights and powers: to introduce any product that isn’t harmful and if so to have warnings, price at any level as long as no discrimination among similar class of buyers, spend what money they want on promotion as long as it isn’t unfair o Buyers rights and powers: refuse any product offered to them, expect safe products, receive adequate info about product, expect product to be what represented to be  Product-liability law – responsibility of manufactures & sellers for defects in products  Strict-liability – manufacturers and seller liable for any personal injury and property damage  Cartel – An agreement between enterprises to lessen competition o Methods to reduce competition  Parallel pricing – competing companies adopt similar pricing strategies  Quota setting – imposing limits on production  Market sharing – dividing market based on geographical basis  Product specialization – each company agrees to specialize in products  Monopoly – a situation where no competition and benefits of free market lost  Taxes are used for payment of services provided by govt o Income tax – taxes based on income of businesses and individuals o Property tax – imposed on real and personal property based on assessed value of property o Payroll tax – collected by employer and remitted to federal govt using deduction from employee pay o Sales tax – levied on goods/services when sold; percentage of price o Excise tax – imposed on certain goods like gas, alcohol and tobacco Chapter 7 Analyzing the Business

about:blank 2/31  Management of info systems (MIS) – discipline that involves management of people, process and technology around care of info  Information system (IS) – combo of technology, people and the process that an organization uses to produce and manage info o Receive input from stakeholders (date) classify and change data into info make sure that right people have   right info at right time evaluate the value of technology used to ensure it is optimal   Competitive advantage - unique features of company and its products that are perceived by target market as significant and superior to those of the competition; differential advantage  Achieving success – financial performance through numbers, meeting and exceeding customer needs ( second level communication - when complaints take it serious) o Gap analysis:  determine real gap between customer expectations and perceptions (survey)  determine sources and causes of gap (miscommunication)  corrective action, being committed to solutions  Stakeholders of a business – owners, employees, customers  SWOT analysis – looks at s trength and eaknesses of company itself and the pportunity and hreats of company in w o t external environment o Internal strengths – good marketing skills, brand name rep, broad market coverage o Internal weaknesses – narrow product line, poor marketing, poor financial management o Opportunities – Expansion of core business, expansion of foreign market, new acquisitions o Threats – change in consumer taste, downturn in economy, rise in new/substitute products  Porter’s five forces model: model focusing on the five forces that shape competition within an industry: o Risk of new entry by potential competitors o Degree of rivalry among established companies in industry o Bargaining power of buyers o Bargaining power of suppliers o Threat of substitute products  Industry life cycle model: useful tool for analyzing the effects of an industry’s evolution on competitive forces o Five stages: 1)intro 2)growth 3)cost or shakeout 4)maturity 5)decline  Vision Statement: clear concise picture of companies future direction in terms of value and purpose that is used to guide and inspire  Mission statement: clear concise articulation of how company intends to achieve its vision; how different from competition and keys to success  Business Level Strategy: descries competitive position  Corporate level strategies o Concentration – one product, market or technology o Integration(Vertical) – along the supply chain, backward like Campbell’s soup making its own cans OR forward such as Sony operating its own stores o Integration (horizontally) – with similar businesses such as Wendy’s buying Tim Hortons (done often through mergers and acquisitions) o Growth – Through different combo of product/market penetration or expansion  Ansoff’s Matrix:  Market penetration (existing product in existing market),  product development (new product, old market),  market development (existing product, new product),  diversification (new products, new markets)  Pro Forma Financial statements: projected financial statements of future values o Pro forma statement of income – determined through past expenses as percentage of sales then projected based on sales projections o Pro forma statement of financial position – created by applying existing ratio levels from current statements. More complicated o Pro forma statement of cash flows – critical for a business. Can still show profitability yet have threat of bankruptcy because no cash to pay bills  Future of Analyzing business o Customers – make sure one analyzes customer happiness and responsibility to customer o Environment – leaving clean, safe and protected environment for future o Society – expectation that companies will give back to society that supports without expectation of financial gain

about:blank 4/31  Full Employment: where all people want to work and have jobs  Unemployment Rate: percentage of total labour force actively looking for work but not actually working o Frictional – short term unemployment not related to business cycle o Structural – caused by mismatch between available jobs & skills of available workers in region or industry, not business cycle o Cyclical – occurs when downturn in business cycle reduces demand for labour through economy o Seasonal – unemployment occurring during specific seasons in different industires  Inflation – situation where average of all prices of goods/services rising  Purchasing power – value of what money can buy o Higher inflation = reduced purchasing power  Demand pull inflation – occurs when demand for goods/services higher than supply (Sask housing market)  Cost push Inflation – when increase in production cost push up price of final goods/services  Consumer Price Index (CPI) – index of prices of a shopping basket of goods/services purchased by consumer (food, housing, transportation) o Reflect broad changes in consumer spending habits  Producer Price Index (PPI)- index prices paid by producer and wholesalers for various commodities, such as raw material, partially finished goods, and finished products  Bank of Canada- Canada’s central bank, objective is economic and financial well-being of Canada creating balance of growth, employment and price stability o Monetary Policy – measure taken by BOC to regulate amount of money in circulation to influence the economy  Contractionary – use of MP by BOC to tighten money supply by selling govt securities or raising interest rates  Expansionary – use of MP by BOC to increase growth of money supply o Fiscal Policy – govt use of taxation and spending to affect economy o Federal budget deficit – condition that occurs when federal govt spends more for programs than collects in taxes o National Debt – accumulated total of all federal annual budget deficits o Crowding out – occurs when govt spending replaces spending by the private sector  EG. Govt spends more on public transit individual spends less on private transportation o Bonds - securities that rep long term debt obligations (liabilities) issued by corporations and govt o Strategic Alliance – Co-op agreement between companies; Strategic partnership Chapter 5  Global Vision – ability to recognize & react to international business opportunities, be aware of threats from foreign competition, effectively use international distribution networks  Multinational Corporation – corporation that moves resources, goods/services, skills across nation boundaries without regards to country in which headquarters located o Advantages: overcome trade problems and better access to customers, better control costs (cheaper labour), tap new technology from around globe o Challenges: social/cultural issues, legal/regulatory  Why countries trade: o No one country produces all products people want/need o Want for trade with countries of surplus o Technology without resources to use on  Free trade: movement of goods/services among nations without political/economic trade barriers  Balance of trade: countries ratio of exports to imports over period of time  Trade surplus: when value of countries exports exceeds imports (favorable)  Trade deficit - value of countries imports exceeds that of exports (unfavorable)  Balance of payments – difference between money coming in and out of country  Floating exchange rate – system which prices of currencies move up and down based on demand for and supply of various currencies  Devaluation – lowering of value of nations currency relative to other currencies  Why global: o Additional profits o Cost saving o Leverage a unique product or tech advantage o Saturated domestic markets & excess capacity o Exclusive market info  Absolute advantage – when country can produce and sell products at a lower cost, OR country only provider of a product

about:blank 5/31  Comparative Advantage – concept that a country should specialize in the product that it can produce readily and cheaply, and trade these for goods foreign countries can produce most readily and cheaply o Canadian Comparative Adv – Ag Tech, wood, hockey players  Fear of trade and globalization o Canadians lose jobs o Employers may threaten to export jobs if there are labor disputes o Service/white collar workers are increasingly seeing their operations moving offshore  Benefits of trade and globalization o Export jobs often pay more o Open economy spurs innovation with fresh ideas from abroad o Productivity grow quicker when countries produce goods and services in which they have comparative advantage; higher living standards  Free trade: policy permitting people of a country to buy/sell where they please o Free trade zone: area where nations allow free (or almost free) trade with each other while imposing tariffs on goods from nations outside zone  Protectionism: policy of protecting home industries from outside competition by establishing artificial barriers such as tariffs and quotas o Preferential tariff: tariff is lower for some nations than others  NAFTA (north America free trade agreement) – 1994 agreement creating free trade in Canada, USA and Mexico  Mercosur - agreement between Argentina, Brazil, Paraguay, Uruguay and Venezuela  EU – trade agreement among 28 European nations  ASEAN (assoc of Southern Asian Nations) – trading bloc with 10 member states  Licensing – legal process allowing use of manufacturing/patents/knowledge  Contract Manufacturing – private label manufacturing by a foreign country  Joint ventures – Domestic firms buys/joins a foreign company to create new entity  Direct investment – Active ownership of a foreign company/manufacturing facility  Countertrade – form of international trade which part or all payment for goods/services is in form of other goods/services  Fostering Global Trade o Dumping: practice of charging a lower price for a product in foreign markets than in company’s home basket (to rid of surplus) o World Trade Organization: established by Uruguay round table (1994) oversee international trade, reduce barriers and resolve disputes among member nations o World Bank: international bank that offers low interest loans, advice/info to countries o International Monetary Fund: (1945) promotes trade, short term loans for members, lender of last resort for troubled nations  Nationalism: sense of national consciousness that boosts the culture and interest of one country over all other countries o EG. Music on radio must have 35% Canadian content  Infrastructure: basic institutions and public facilities on which economy’s development depends  Challenges to Canadian Capitalism o High labor costs more educated, higher standard of living  o Inability to move due to large bodies of water (cheaper to move across water but large land mass) o Small domestic market o Large, resource based production  Barriers to trade o Natural: language, culture, regulatory o Tariff: tax imposed on imported goods  Protective tariffs: tariffs imposed to make imports less attractive to buyers than domestic products o Non-tariff:  Quotas – max amount one may ship/receive  Customs – (adding French to labels)  Embargo – ban on imports/exports of a product  BRICS (Brazil, Russia, India, China, South Africa) o Fastest growing/emerging market economies o Gave most to growth of world GDP

about:blank 8/31 Chapter 8  Sole proprietorship: business established, owned, operated and financed by one person o Advantage: pure profit, no special taxation, direct control of business o Disadvantages: unlimited liability, personal commitment, losses are owners responsibility  Partnership o Association of two or more individuals who agree to operate business together for profit  General partnership : all partners share management and profits, each can act on behalf of company, unlimited liability  Limited Partnership: one or more general partners with unlimited liability, one or more with whose liability is to the investment  General Partners: partners with unlimited liability for all company’s business obligations and who control operations  Limited Partners: partners who liability is only bound to what they invest, help finance business but not participate in company operations  Limited Liability Partnership – each partner is protected from each other, liability limited harm resulting from other parties actions o Advantages: more access to capital, longer survival, shared risk, no corporate tax, shared risk o Disadvantages: unlimited liability, division of profits, disagreements  Corporation o Legal entity with an existence and life separate from its owners, who aren’t personally liable for the entity’s debt  Public: corporation whose shares are widely held and available to public  Private: Corporation whose numbers of shareholders is limited; normally restricts transfer of shares to third parties, shares do not trade on a recognized stock exchange  Crown: companies that only provincial and federal govt can set up (Canadian Post) o Advantages: limited liability, unlimited life, easy transfer of ownership, ability to attract financially o Disadvantages: cost/complexity, double taxation of profits, more govt restrictions, termination difficult  Shareholders: owners of the corporation who hold shares of stock that provide certain rights; stockholders  Board of directors: group of people elected to handle overall management of corporation, set corporate goal/policy, hiring corporate officers, oversee company operations and finances hire president, vice president, etc.   One person corporation: corporation with only one shareholder, common in professional practices (medical doctors) and trades (plumbers)  Co-operative: legal entity formed by people of similar interest (customers/suppliers) to reduce costs and gain economic power; limited liability, unlimited life span, all profits distributed to member owners in proportion to contribution o Meet common need for member; one member-one vote system- profit based on usage  Joint Venture: business agreement which two or more businesses agree to pool resources for project or venture  Franchising: form of business organization based on business arrangement between franchisor which supplies product concept, and franchisee which sells goods and services in certain geo area (pizza hut, OPA!) o Advantages: personal ownership, financial advice and assistance, recognized name/product o Disadvantage: start-up costs, shared profit (royalty), management regulation  Merger: combo of two or more companies to form a new company with new corporate identity  Acquisition: purchase of a company by another company or investor group o Horizontal: involving companies at same stage of supply chain in same industry, done to reduce costs, expand offerings, reduce competition o Vertical: involving companies at different stages of the supply chain in same industry, done to gain control supplies of resources or gain access to different market o Conglomerate: involving companies of unrelated business, done to reduce risk o Friendly takeover: takeover supported by management and broad directors of target company o Hostile takeover: takeover that goes against wishes of management and directors  Why don’t they work? o Companies overpay, managers disagree, cost cutting obsession hurts business  Life-cycle framework:

about:blank 9/31 o Start up, growth, maturity, revitalization/decline  Future business ownership o Joining forces, baby boomers rewrite rules of retirement, more franchise innovations Chapter 9  Management: process of guiding and directing development, maintenance, allocation of resources to attain organizational goals  Efficiency: using the least amount of resources to accomplish the organizations goals (doing the right thing)  Effectiveness: the ability to produce the desired results or goods  Leadership: relationships between a leader and followers who want real change; resulting in outcomes that reflect their shared purpose  Authority – right to make decisions (what needs to be done)  Responsibility – decisions made in authority step, leader must delegate tasks to correct people with resources needed  Accountability – stress that if a subordinate is not successful in completing the responsibilities, it is important for leader to ask oneself if delegated correctly. (person have proper knowledge, resources, etc.)  Managerial Process o anticipating problems and designing plans to deal with them, o coordinating and allocating the resources needed to implement plans, o guiding personnel through the implementation process, and o reviewing results and making any necessary changes.  This last stage provides information to be used in ongoing planning efforts, and thus the cycle starts over again.  STRATEGY o 1. Preserve the founder’s vision and values Best Managed companies successfully preserve the founder’s original vision, core values, and philosophies. They also maintain a sense of ‘family culture’ as the company grows. o 2. Focus on corporate strategy The owners of Best Managed companies are highly strategic. They hire a strong and talented group of senior management to run the day-to-day operations of the business so they can focus on strategy. o 3. Focus on core competencies Given a smaller pool of resources (people, money and time), Best Managed companies are laser-focused in leveraging and improving core competencies, rather than developing new ones.  CAPABILITY o 4. Establish strong customer relationships Exceptional customer relationships are key to a Best Managed company’s success. Best Managed companies believe exceptional customer relationships are the foundation for solid growth. As a result, Best Managed companies spend a lot of time understanding their clients’ current and future needs. o 5. Measure success Best Managed companies use financial and qualitative metrics to measure success. These metrics are shared with management at all levels of the organization and across all functions. Since these metrics are available throughout the company, all departments work together towards common goals. o 6. Facilitate cross-functional collaboration Best Managed companies foster a culture of team work. Employees across all functions collaborate to share ideas and work together more efficiently and effectively, resulting in competitive advantage when speed to market is a critical factor.  COMMITMENT o 7. Hire the right people Best Managed companies spend substantial time and money to hire the right people. Each new employee must have an incremental skill set and be a fit for the team and corporate culture. o 8. Set challenging goals for employees Best Managed companies set challenging, yet achievable goals to stimulate and engage their employees. As a result, both personal and corporate objectives are achieved through collaborative efforts. o 9. Create flexible compensation packages Best Managed companies value their employees and provide them with flexible compensation packages, including above-average monetary and non-monetary compensation. Best Managed companies are more likely to provide unique and custom-tailored incentives.

about:blank 11/31  Employee Empowerment: process of giving employees increased discretion to make decisions and control over the resources needed to implement those decisions o Reasons for empowering: better decisions for those closer, fewer busier managers, more valuable employees  Controlling/Evaluating o Convert vague goals like ‘better quality’ or ‘improved performance’ to specific objectives that are measurable o Controlling is the process of assessing the organization's progress toward accomplishing its goals. It includes monitoring the implementation of a plan and correcting deviations of that plan. Controlling can be visualized as a cyclical process made up of five stages, as shown on this slide. o Performance standards are the levels of performance the company wants to attain. These goals are based on its strategic, tactical, and operational plans. Effective performance standards state a measurable behavioral objective that can be achieved in a specified time period. o Why is controlling such an important part of a manager’s job? It helps managers to determine the success of the functions of planning, organizing, and leading. Second, control systems direct employee behaviour toward achieving organizational goals. Third, control systems provide a means of coordinating employee activities and integrating resources throughout the organization.  Technical skills: o Managers specialized area of knowledge and expertise, ability to apply knowledge  Human relations skills: o Managers interpersonal skills used to accomplish goals through use of human resources  Conceptual skills o Manager ability to view the organization as a whole, understand how parts are intendant and asses how organization relates to external environment  Global Management skills: o Manager ability to operate in diverse cultural environments  Three important trends in management today are: o Managers should be prepared for crises. Managers should not become immobilized by the problem or ignore it. Managers should always tell the truth about the situation, and put the best people on the job to correct the problem. Finally, managers must learn from the experience. o The second trend is the proliferation of information technology. An example is PeopleSoft, a provider of automated human resource functions. o As companies expand around the globe, managers will face the challenges of directing the behavior of employees around the world. They must recognize that cultural differences cause people to respond differently, and develop an individual-level program that is based on values and principles. Managers should apply example, involvement, and trust to this process. Chapter 10 o Building organizational structures o Span of control o Centralization of decision making o Division of labour o Departmentalization o Delegation o Departmentalization: process of grouping jobs so similar tasks and activities coordinated o Function: based on primary functions performed o Product: based on goods/services produced or sold o Process: based on production process used o Customer: based on primary type of customers served o Geographic: based on the geographic segmentation of organizational units o Division of labour: process of dividing work into separate jobs and dividing workers o Specialization: degree to which tasks are subdivided into smaller jobs o Managerial hierarchy: levels of management within organization; top, middle, supervisory o Chain of command: line of authority (who reports to who) o Span of control: number of employees a manager directly supervises o Narrow: more managers, less employees in charge of  Adv: higher degree of control, closer supervision provides quicker feedback, more familiarity  Dis: more expensive, isolation of top management, slower decision making

about:blank 12/31 o Wide: Less manager, more employees  Adv: increased efficiency & reduced costs, quicker decision making, higher job satisfaction because employee empowerment  Dis: less control, lack of coordination/synchronization, lack of familiarity o Determination of span control  Nature of task  Location of workers  Ability of the manager to delegate responsibility  Amount of interaction and feedback  Level of skill and motivation of workers o Centralization: degree to which formal authority concentrated in one area or level of organization  Adv: increased uniformity (less duplication, more efficiency, Max control), strong corporate image  Dis: less responsive to customer, less empowerment, many layers/slower, lots policies/procedures o Decentralization: Process of pushing decision making authority down organizational hierarchy  Adv: faster decision making, ability to adapt to customers, few layer (faster)  Dis: loss of control, complex distribution, possible duplication o Organizational Structures  Tall  Many layers of management  Span of control limited  Costly to maintain  Lots of paperwork  Inefficient communication and decision making  Limited responsiveness to customer  Flat  Few layers of management  Broad span of control  Highly responsive to customer demands due to increased employee empowerment o Line Position  Positions in organization directly concerned with producing goods/services and are directly connected top to bottom o Staff position  Individuals who provide administrative and support services that line employees need to achieve the firms goals o Work groups: share resources and coordinate efforts to help members better perform their individual jobs o Work teams: similar to work groups, but require the pooling of knowledge, skills, abilities and resources to achieve a common goal o Team types: o Problem solving: generate ideas and alternatives and may recommend a course of action o Self-managed: manage themselves without formal supervisor, take responsibility for goal setting, planning work activities o Cross- sectional: made up of employees from same hierarchical level, but different functional areas o Building of high performance teams o Select appropriate employees for the team. o Team members should have a variety of complementary skills. o Team must have clearly defined goals and roles. o Need to practise good communication. o Need for a great leader.

about:blank 14/31  Long term employment  Slow career development  Moderate specialization  Group decision making  Individual responsibility  Concern for workers  Informal control over employees o Herzenberg’s Motivating Factors  Motivators: Work, achievement, recognition, importance, responsibility, growth/advancement  Maintenance Factors: Pay, job security, job environment o Contemporary Views on Motivation  Expectancy Theory: amount of effort employees exert depend on expectations of the outcome, 1. Determine the rewards valued by each employee 2. Determine the desired performance level 3. Make the performance level attainable 4. Link rewards to performance 5. Determine what factors might counteract the effectiveness of an award 6. Make sure the reward is adequate for the level of performance  Equity Theory: employees evaluate outcomes in relation to their inputs and compare to past 1. a different position in the current organization 2. a different organization OR 3. to another employee’s experience inside the organization 4. to another employee’s experience outside the organization  Goal Setting Theory: individuals intention to work toward a goal is a primary source of motivation 1. Specific goals lead to a higher level of performance 2. More difficult goals lead to better performance 3. Feedback on progress toward the goal enhances performance  Reinforcement Theory 1. By introducing or removing consequences, managers can encourage functional behaviours or discourage dysfunctional behaviours. 2. Positive (rewards) and negative (punishment) reinforcers motivate behaviour  Positive reinforcement : praise, recognition, pay, time-off  Negative reinforcement : reprimands, reduced pay, layoff Based on perception: There are often Errors Options for Increasing Motivation Job Enlargement Job Enrichment Job Rotation

about:blank 15/31 o Motivational Techniques Summary  Expectancy Theory: is the reward worth the effort?  Equity Theory: maintain equity compared to others in similar positions  Goal-setting theory: goals must be attainable and accomplished by feedback  Reinforcement theory: positive or negative feedback o Incentives  Non-monetary Incentives – Recognition, Empowerment  Monetary Incentives – Profit/Gain sharing, Bonuses, Stock options, Piece-rate plans o Golden Rules of Rewards  Rewards should be tied directly to the behaviour that the manager wants repeated  Employees should know which rewards are available to them and how they can go about obtaining them  Desired behaviour should be rewarded as soon as it occurs  Employees should be rewarded only for what they themselves have done o Future Motivation  Education and training.  Employee ownership.  Work-life benefits.  Nurturing knowledge workers. After midterm Chapter 12  Human Resource Management o The process of hiring, developing, motivating, and evaluating employees to achieve organization goals o Job analysis Human resource planning/forecasting employee recruitment Employee    selection Training/development   performance planning/evaluation compensation and benefits   Human resource planning o Job Analysis: study of the tasks required to do a particular job well o Job Description: Tasks and responsibilities of a job o Job specification: List of the skills, knowledge, and abilities a person must have to fill the job o HR demand Forecast :  Determine # of people needed by some future time  Estimate # of people currently involved who will be available to fill jobs at some future time o Contingent Workers : Persons who prefer temporary employment, part-time or full time  Employee Recruitment o Internal : Policy of promotion from within o External: Find/attract qualified applicants from external sources o Recruitment: attempt to find/attract qualified applicants in external labour market o Job Fair: An event, typically one day held to bring job seekers and companies together o Corporate open house: persons invited to open house on premises of corporation; qualified applicants encouraged to complete application before leaving  Types of training/development o On-the-job: Orientation, job rotation, apprenticeship, mentoring  Orientation: training that preps employee to perform on job, info on job, assignments, rules, as well as company policies  Job rotation: reassignments of job by doing it by guidance  Apprenticeship: form of on job training that combines specific job instruction with classroom instruction  Articling: working in accredited environment to apply theoretical knowledge learned from formal education and develop professional judgement  Mentoring: on the job training which senior manager or other experienced employee provides job or career related info to a protégé o Off-the-job: Programmed instruction, simulation  Programmed instruction: form of computer assisted off the job training  Simulation: scaled down version or mockup of equipment, process, or work environment  Performance planning/evaluation o Performance appraisal: comparison of actual performance with expected performance to assess an employee’s contribution to the organization

about:blank 17/31 Chapter 13  Marketing: process of planning/executing the conception, pricing, promotion and distribution of goods and services to facilitate exchanges that satisfy individual and organizational objectives o process of discovering the needs and wants of potential buyers and customers and then providing goods/services that meet or exceed expectations  Products: any goods/services along with their perceived attributes and benefits that create value from customer  Exchange: process in which two parties give something of value to each other to satisfy needs  Core value proposition: statement of the tangible benefits customers receives from using your products o Idea: what does product do for customer o Benefit: what is benefit to customer o Target: how can you segment the customer groups? How do you reach them? o Perception: How do you want to be perceived by customer, public or stakeholders o Outcome (reward): Net result for company?  Marketing concept: identifying consumers need and then producing the goods/services that satisfy them while making profit for organization o Find a need and fill it  The Right Principle: getting Right good/services to  the people at the Right  Right place/time/price  using promotion techniques right  Developing a Total product offer o Everything that consumer evaluates when deciding to buy ( the value package)  Value = benefits - cost o Includes both tangibles and intangibles such as price, packaging, store surroundings, speed pf delivery, buyers past experience, brand image, etc o Intense competition forces companies to constantly develop new products  Production orientation: approach in which company works to lower production costs without a strong desire to satisfy customer needs  Customer value: ratio of benefits to the sacrifice necessary to obtain benefits as detrained by customer; reflects willingness of customers to buy a product  Customer satisfaction: customers feeling that a product has met or exceeded expectations  Relationship marketing: strategy that focuses on forging long term partnerships with customers by offering value and providing customer satisfaction  Customer relationship management (CRM): processes used by organization to track and organize info about current and prospective customers o Customer Centric o Learn bout customers, what satisfies them o 80/20 rule 80% of your business is from 20% of your customers (not all profitable; industry dependent)   Environmental scanning: process by which company continually collects and evaluates info about external environment  Target Market: specific groups of consumers toward which a company directs its marketing efforts o Variables to consider: Size and growth potential, how reachable, profitable, nature of market and company  Mass Marketing vs. Segmentation o Mass Marketing: developing products and promotions for large groups of people o Segmentation: keeping consumers over time by offering them products and services that exactly meet their requirements (custom made)  Marketing Mix (4 P’s): blend of product offering, pricing, promotional methods and distribution system that brings specific groups consumer superior value o Product: taking goods/services & selecting name, packaging, colors, warrantees, accessories and service program

about:blank 18/31 o Price: setting a price based on demand and cost of goods/services o Place (distribution): creating means by which products from the producer to the consumer o Promotion: unique combo of personal selling, advertising, publicity, and sales promotion to stimulate the target market to buy product/service  Social Marketing: application of marketing techniques to social issues and causes; used to convince customers of ideas, attitudes and behaviors  Buyer behaviour: actions people take in buying and using goods/services  Culture: set of value, ideas, attitudes, and other symbols created to shape human behaviour  Reference group: formal and informal groups that influence buyer beha  Opinion leaders: those who influence others  Socializing Process: the passing down of cultural norms and value to ch  Personality: a way of organizing and grouping how an individual reacts t  Self-Concept: how people perceive themselves  Ideal self-image: the way a person would like to be  Real self-image: how an individual perceives themselves  Perception: process by which we select, organize, and interpret stimuli i  Selective exposure: process of deciding which stimuli to notice and whi  Belief: organized pattern of knowledge that an individual holds as true a  Attitude: learned tendency to respond consistently toward a given obje  Involvement: the amount of time/effort buyer invests in searches, evalu behaviour  Routine response behaviour: purchase pf low cost, frequently bought items with little search or decision making  Limited decision making: situation in which consumer has previous product experience but is unfamiliar with current brands available  Extensive decision making: Purchasing an unfamiliar, expensive, infrequently bought item  Market Segmentation: process of separating, identifying, and evaluating layers of market to identify target market o Geographic: region, size, market density, climate o Demographic: gender, age, income, education o Psychographic: lifestyle, personality, interests, values, attitudes o Benefit: what a product can do rather than customer characteristics o Volume: Usage (light-heavy) amount purchased   Marketing Research: process of planning, collecting and analyzing data relevant to a marketing decision o What is the info being sought? o Does the info exist?  Survey research: method in which data collected by respondents in person, telephone, mail, at mall, or through internet to obtain facts, opinions and attitudes  Observation research: method in which investigators monitors respondent’s actions without interacting directly with respondents; for example by using cash registers with scanners

about:blank 20/31  Introduction Stage: little competition, limited distribution, heavy promotion, low sales volume, high failure rate  Growth Stage: sales grow increasingly, many competitor, increased distribution, aggressive brand advertising  Maturity Stage: sales growth (at decreasing rate), saturated markets, global intro of products, product line extension  Decline Stage: sales/profits fall, trade allowance eliminated, most advertising/sales eliminated o Rate of decline governed by:  rate of change in consumer taste  rate at which new products are introduced  profit maximization: pricing objective that entails largest possible profit from a product by producing it for as long as the revenue from selling the product exceeds the cost of producing it  Target rtn on investment: pricing objective where price of a product is set to give the company the desired probability in terms of return on its money  Value Pricing: pricing strategy in which the target market is offered a high-quality product at a fair price and with good service  Product differentiation o Attempt by manufacturer to create differences in mind of consumers real or perceived o Packaging can make product more attractive o Services can be packaged such as spa offering pedicure, haircuts and massages of one inclusive price  Product Pricing Strategies o Product Skimming: initial high price, lowering over time o Penetration pricing: selling at low prices in hope of large sale volume o Leader Pricing: below normal mark-up or even below cost to attract customers o Loss Leader: product priced below cost as part of leader pricing strategy o Bundling: grouping two or more related products together; pricing as single o Odd-even pricing (psychological): setting a price at odd number (bargain) and even number (quality) o Prestige pricing: increasing price of product so that consumer will perceive as higher quality, status or value  How manager set prices o Break-even point (break-even quantity): price of which costs are covered, additional sales is profit o Fixed costs: costs that don’t vary with different levels of output (Rent) o Variable costs: costs that change with different levels of output (wages) o Fixed Cost contribution: selling price per unit (revenue) minus variable costs per unit o Total Revenue: selling price per unit x number of units sold o Total Cost: sum of fixed costs + sum of variable costs o Total Profit: total revenue – cost  Pricing o Cost-based pricing: Estimated cost of product + profit margin = Price o Demand-based pricing: Estimated selling price – profit margin = target cost o Competition-based pricing: Same, at, or below competitors o Markup pricing: pricing in which certain percentage is added to products cost to arrive at cost o Activity-based costing (ABC): assign resource cost through all the activities to either produce the product or acquire it for resale o Markup percentage = Markup amount/Item Cost (based on cost or markup on cost) o Markup percentage = markup amount/selling cost (based on selling price or markup on selling price)  Importance of Distribution (Logistics) o Distribution: efficiently managing acquisition of raw materials to factory and movement of products from the producer to industrial users and consumers o Manufacturer: a producer; organization that convert raw materials to finished products o Distribution channel: series of marketing entities through which goods/services pass on their way from producer to end user o Marketing intermediaries: organization that assist in moving goods/services from producers to end users o Agents: sales reps of manufacturers and wholesalers o Brokers: Go-betweens that bring buyers and sellers together o Industrial distributors: independent wholesalers that buy related product lines from many manufacturers and sell to industrial users o Wholesalers: companies that sell finished goods to retailers, manufactures and institutions o Retailers: companies that sell goods to consumers and to industrial users for their own consumption o Dual distribution: two or more channels that distribute the same product to target markets

about:blank 21/31 o Omni channel: the integration of processes of planning, purchasing, allocation, replenishment, promotion, and so on, focusing on customers so that they have a seamless, integrated and consistent experience o Strategic channel alliances: one manufacturer using another manufacturers previously established channel to distribute its goods  Easing the flow of goods o Breaking bulk/Allocating: breaking large shipments of similar products into smaller usable lots tanker of milk into ( jugs) o Sorting Out: breaking many different items into separate stocks (eggs sorted in size & grade) o Accumulating: bringing similar stocks together into larger quality (eggs put into packages of one dozen)  Disintermediation o Collapse the supply chain o More profit to the business o Ways to do it  Private labelling  .Com (amazon)  Purchasing Power – Wal-mart  Market coverage o Exclusive distribution: system where manufacturer selects one or two dealers in an area to market its products o Intensive distribution: system where manufacturer tries to sell products wherever there are potential customers o Selective distribution: system where manufacturer selects limited number of dealers in an area (more than 1 or 2)  Responsibility of supply chain managers o Production scheduling, choosing a warehouse location and type, transportation decisions, etc  Promotion: attempt by marketers to inform, persuade, or remind consumers and industrial users to engage in the exchange process o Goals of promotion : Creating awareness Getting consumers to try products Provide info Keep loyal    customers increase frequency and amount of use identify target customers    Promotional Mix: combo of advertising, personal selling, sales promotion, and public relations used to promote a product o Advertising: any paid form of personal presentation by identified sponsor o Personal selling: a face-to-face sales presentation to a prospective customer o Sales promotions: marketing events or sales efforts, not including advertising, personal selling and public relations , that stimulate buying (Coupons and samples, displays, exhibition) o Public relations: any communication or activity designed to win goodwill or prestige for a company or person  Integrated marketing communication: coordination of all promotional activities to produce unified, consistent message that is customer focused  Factors that affect Promotional mix: Nature of product market characteristics available funds push/pull strategy     Detailing: physical stocking of merchandise at a retailer by salesperson who delivers the merchandise  Push strategy: strategy which manufacturer use aggressive personal selling & trade advertising to convince a wholesaler/retailer to carry/sell merchandise  Pull strategy: strategy which manufacturer focuses on stimulating consumer demand for its product, rather than trying to persuade wholesalers/retailers  Word of mouth o Company encourages satisfied customers to tell others o Cheapest, most believable and most effective  Distribution centres: warehouses specialize in rapid movement of goods to retail stores by making/breaking bulk  Inventory control system: maintains adequate assortment of items to meet users or customers needs  Future in promotion o Less advertising, promotion more interactive, more direct marketing (catalogues & internet), marketing $ going social, bargains, supply chain management; increasing importance Chapter 15  Operations management: management of production process o Changes in consumer’s expectations, tech and competition  find efficient/effective methods of producing goods/services