Tuesday, May 4, 2010

Bus 3500 class notes

1-21: Chapter 1 – overview of marketing
- Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customer, clients, partners and society at large.
- An exchange must involve at least two parties, something of value, communication and delivery, freedom to accept or reject and a desire to deal with the other party.
- Customer value is the relationship between benefits and the sacrifice necessary to obtain those benefits.
- Customer satisfaction occurs when the customer feels that a product or service met or exceeded their expectations.

1-28: Chapter 3 – social responsibility and ethics
- Corporate and social responsibility is a business’s concern for society’s welfare
- Sustainability is the idea that socially responsible companies will outperform their peers by focusing on the world’s social problems and viewing them as opportunities to build profits and help the world at the same time.
- The difference between ethics and morals is that ethics are moral principles or values that generally govern the conduct of an individual or a group, and morals are the rules people develop as a result of cultural values and norms.
- Most companies will implement a code of ethics. It is important for employees to know the companies code of ethics so that they do not violate it.
- Tweens are ages 8 – 14, Gen Y is 1979 – 1994, Gen X is 1965 – 1978, and baby boomers are 1946 – 1964.

2-4: Chapter 5 – consumer decision making
- Consumer behavior is the processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use.
- The decision making process is as follows: 1 – Need recognition. 2 – Information search. 3 – Evaluation of alternatives. 4 – Purchase. 5 – Purchase behavior.
- Many things influence a consumer purchase such as: social factors like reference groups, opinion leaders, family; individual factors like gender age and family life-cycle stage, personality, self-concept, and lifestyle; cultural factors like culture and values, subculture, social class; psychological factors such as perception, motivation, learning, beliefs and attitudes.

2-11: Chapter 7 – segmenting and target marketing
- A market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.
- The criteria for segmenting a market are: substantiality, identifiability and measurability, accessibility, and responsiveness.
- A target market is a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.
- Positioning is developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.

2-18: Chapter 8 – decision support systems and market research
- Marketing information is the everyday information about developments in the marketing environment that managers use to prepare and adjust marketing plans.
- Database marketing is the creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns.
- The marketing research process is as follows: 1 – Identify and formulate the problem/ opportunity. 2 – Plan the research design and gather primary data. 3 –Specify the sampling procedures. 4 – Collect the data. 5 – Analyze the data. 6 – Prepare and present the report. 7 – Follow up.
- Advantages of internet surveys: Rapid development, real time reporting, dramatically reduced costs, personalized questions and data, improved respondent participation, contact with the hard to reach people.

2-25: Chapter 9 – product concepts
- Product is everything both favorable and unfavorable, that a person receives in an exchange.
- Brand names are the part of a brand that can be spoken, including letters, words, and numbers.
- Brands are a name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.
- Brand mark is the elements of a brand that cannot be spoken.
- Brand equity is the value of a company and brand names.
- A trademark is the exclusive right to use a brand or part of a brand.

3-4: Chapter 10 – developing and managing products
- New product is a product new to the world, the market, the producer, the seller, or some combination of these.
- Ideas for new products can be found in many places such as: Customers, employees, competitors, vendor, and research and development.
- Test marketing is the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.
- Innovation is a product perceived as new by a potential adopter.
- Diffusion is the process by which the adoption of an innovation spreads.
- Product life cycle is a concept that provides a way to trace the stages of a product’s acceptance, from its introduction to its decline.

3-25: Chapter 12 – marketing channels
- Marketing channels are a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer.
- Supply chain is the connected chain of all of the business entities, both internal and external to the company, hat perform or support the logistics function.
- A direct channel is a distribution channel in which producers sell directly to consumers.
- Dual distribution is the use of two or more channels to distribute the same product to target markets.
- Levels of distribution intensity are usually intensive, selective and exclusive distribution.
- Channel partnering is the joint effort of all channel members to create a supply chain that serves customers and creates a competitive advantage.

4-1: Chapter 14 – integrated marketing communications
- Promotion is the communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response.
- Competitive advantage is one or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors.
- Publicity is public information about a company, product, service, or issue appearing in the mass media as a news item.
- Sales promotion is marketing activities other than personal selling, advertising, and public relations that stimulate consumer buying and dealer effectiveness.
- Push strategy is a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise.
- Pull strategy is a marketing strategy that stimulates consumer demand to obtain product distribution

4-15: Chapter 15 – advertising and public relations
- The major types of advertising are institutional advertising and product advertising.
- Advertising appeal is a reason for a person to actually buy a product.
- Media planning is the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost effectively communicate the message to the target audience.
- Cooperative advertising is an arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer’s brand.
- A media mix is the combination of media to be used for a promotional campaign.

4-22: Chapter 16 – sales promotion and personal selling
- Sales promotions are used to increase the effectiveness of promotional efforts.
- Rebates are often used in place of coupons. Advantages include extra product price appeal, but because rebates are usually required to be mailed in by the consumer, they are often not redeemed.
- A premium is an extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product.
- Relationship selling is a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships.
- A needs assessment is a determination of the customer’s specific needs and wants and the range of options the customer has for satisfying them.

4-29: Chapters 17/18 – pricing concepts and setting the right price
- Price is what is given up in an exchange to acquire a good or service.
- Revenue is the price charged to customers multiplied by the number of units sold.
- Price equilibrium is the price4 at which demand and supply are equal.
- Elasticity of demand is a consumers’ responsiveness or sensitivity to changes in price.
- Markup pricing is the cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for.
- A break even analysis is a method of determining what sales volume must be reached before total revenue equals total costs.
- The steps to setting a price are: Establish pricing goals, estimate demand, costs, and profits, choose a price strategy to help determine a base price, and fine tune the base with pricing tactics.
- Price skimming is a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion.
- Penetration pricing is a pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market.
- Price lining is the practice of offering a product line with several items at specific price points.

Thursday, April 29, 2010

Class Notes

1-19: Chapter 1, the Entrepreneurial Life
The entrepreneurs quiz what pretty fun to take. I realized that I scored very well in a lot of the areas that would make me a good entrepreneur. I feel that a few of the things that I am not crazy about in owning and operating my own business, such as customer service and finances are things that I can learn to get good at, and hopefully if I start a successful business, somewhere down the road I can hire somebody to do those things for me.

1-26: Chapter 8, teams, legal forms, and strategic alliances
There are many different ways to start a company,
- Sole proprietorship is a business owned by one person, who bears unlimited liability
- Partnerships are legal entities formed by two or more co-owners (their roles in the company do not have to be equal.)
- Corporation is a business organization that exists as a legal entity and provides limited liability to it owners.
- There are several different types of both partnerships and corporations. All have different stipulations and requirements by local government.

2-2: Chapter 9, choosing a location
In writing my location paper, I learned a lot about how expensive it can be to rent a business space. I learned that most often it isn’t just a $500 dollars a month and you are good to go scenario, but that there are a lot of other factors that will weigh in on your final rental costs. One of the things that surprised me the most that I had not really given much thought to before this assignment was snow removal. I spoke to a landlord that had to bill several of his tenants a few thousand dollars each for the winter month’s snow removal bill. It seems to me that unexpected expenses such as this could almost sink a small company.

2-9: Chapter 11, obtaining financing
I went through America first for my financing research paper and found out a lot of cool things. First of all, there are a lot of banks and credit unions out there that are more than willing to help out small business owners. Perhaps the best way to get funding for your small business is through a line of credit. Business loans are obtainable, but they usually require some type of collateral, such as your house or extremely valuable car.

2-23: Chapter 13, customer relationships
- Stephan R. Covey commits to be prof. for 10 years at USU
- Cognative dissonance is the feeling of regret that often follows most large purchases. ( it’s the “oh crap! What have I done! Feeling.”)
- Responding well to customer complaints is a great way to gain long term customers because it shows commitment.

3-2: Chapter 15, pricing and credit decisions
Colleen Loveless vacuum company
- 20 years to develop their vacuum and it is still changing.
- Money in the beginning came from whatever they could scrape together.
- Be sure to enjoy the work that you are in
- When you run your own company you need to be willing to share the load.
- Treat employees well, and be sure to promote good communication with them.
- Keep profit margins high enough to stay in business.

3-23: Chapter 16, promotional planning
Jullian’s Upholstery guest speaker
- Purchased the business after 3.5 years.
- Had no idea how to run a business, but picked it up as she went.
- Stay out of debt!
- Advertise on the radio, yellow pages and internet.
- Best customers are commercial accounts.

3-30: Chapter 2/18, integrity and ethics
Keep the saw sharp!! Often times we don’t take the time to refine our resources and as a result we always come up short of our expectations. Take the time to work out small problems or issues while they are still small to allow maximum production!

4-13: Chapter 22, managing assets
City council guest lecture
- Your personality is one of your greatest assets.
- Nothing can replace a face to face relationship and a firm handshake.
- Be sure to get to know your customers from the beginning so you can build a long term relationship
- The city wants your small business to succeed and has put many programs and helps in place to aid you and your small business.
4-20: Chapter 21, managing risk
- There is no such thing as a risk free business or a risk free approach to running a business. Just really good methods of reducing risk.
- The two main types of risk are market risk and pure risk. Market risk is the uncertainty associated with an investment decision, and pure risk is the uncertainty associated with a situation where only loss or no loss can occur.
- A good example of pure risk is insurance.
4-27: Chapter 10/23, evaluating financial performance
- Knowing where you are in your business is often something over looked in the first few years of a new business.
- Producing a profit and loss statement each month is a good way for a new business to constantly be measuring progress.
- Don’t fool yourself by counting unsalable inventory at cost. Depreciate it along with the rest of your depreciating assets.
- Be sure to also monitor your standing in relationships with vendors customers and employees to be sure that you are moving in the right direct