Entrepreneurship and Marketing Concepts Quiz

Netflix DVD Subscription Business Model

• Netflix offered online movie rental at a lower cost than in-theatre movies.

• They used a subscription model offering multiple movies simultaneously.

• Customers appreciated the convenience and control of choosing their movies and viewing them at their convenience.

• The service included features such as no due dates, broad selection, good prices, and home delivery.

• Customer Profile:

  • Focused on families and individuals who enjoy movies at home.
  • Customers valued convenience and the ability to watch movies anytime, anywhere.
  • Customers experienced joy and satisfaction by watching movies with friends and family.

• Pain Points for Customers:

  • Uncertain access to new releases and returning (bulky) was an inconvenience.
  • Uncertainty of the movie's quality and availability at the store.
  • Additional costs like late fees.

• Key takeaway: A successful business must tailor its target market to specific needs and desires.

Amazon's Target Market Evolution

• Started with books but now offers a wider range of products.
• Primary focus on digital sales.
• Important to target developed regions with internet access and smartphone usage.
• Age group 24-50, particularly between 30-49, are key consumers.
• Focusing on younger tech-savvy audiences.

Amazon Segmentation

• Loyalty-based customers appreciate customer service and reviews. They value control of their shopping experiences and engage with recommendations.
• Behavioral Segmentation: Convenience is a key motivator for online shopping. Customers look for lower prices and new products.

Key Takeaways

• Target market must be specific and well-defined.
• Amazon's evolved strategy focuses on digital, younger, tech-savvy consumers, and emphasizes customer convenience at attractive prices to maintain their competitive advantage and tailored recommendations.

Business Model Canvas for Uber

• Uber's revenue model is based on charging a 25% commission on rides. It's determined by factors like trip time, route, and idle time.
• Operational costs: IT infrastructure and development, marketing, and driver recruitment.
• Key metrics: Uber tracks app installations, trips booked, and user referrals (crucial in measuring customer engagement and growth of the platform).
• What makes Uber unique? Low-price trips, simple app interactions and usability.

Competitive Environment – Value is the Key!

• Value is the difference between a customer's perceived benefit and the price.
• Best value isn't always the cheapest, but the best quality relative to the price.

Technological Environments

• Business technology allows companies to gain a competitive advantage (e.g., early adoption/first mover vs. second mover).
• Dramatic industry changes include the emergence of new industries and productivity increases through automation.
• Winners are companies that effectively adapt and manage change.

Inventions with Impact

• Canadian inventions have had a beneficial and harmful impact on human lives.

Growth of Electronic Commerce (E-Commerce)

• E-commerce is the buying and selling of goods and services over the internet.

Social Media Marketing

• Social media tools like Twitter, Facebook, blogs, podcasts, and YouTube are used for communication.
• Businesses leverage crowdsourcing strategies for problem-solving and innovation.

Social Environment

• Diversity, aging population, values, and attitudes are influential factors.
• Social responsibility is a crucial consideration in business practices.

Global Environment

• Globalization, free trade, and distribution systems have enhanced global competition.
• Pandemics, terrorism, and calamities pose external risks to global businesses.

Demand

• Demand refers to the quantity of a good or service that consumers are willing and able to buy at each possible price.
• The demand curve graphically depicts the quantity demanded at varying price points (shifts in the curve are due to changes in income, tastes, and expectations of consumers).
• Expansion/contraction in demand—shifts in the demand curve are seen as a rightward (increase) or leftward (decrease) movement in the graph.

Supply

• Supply refers to the quantity of a good or service that producers are willing and able to offer for sale at each possible price. 
• The supply curve shows the quantities supplied at various prices, shifting rightward (increasing) or leftward (decreasing) due to changes in production technology.

Netflix Case Study (Case continued)

• Netflix successfully adjusted to falling prices by increasing sales volume to offset the lower revenue per sale. They maintained minimal cost increases in distribution centers and employees to increase profitability without sacrificing quality.
• Launching new ventures: Greater financial success, independence, flexibility, challenge/innovation are key motivations.

Entrepreneurship

• The key qualities of successful entrepreneurs are: vision, adaptability, and perseverance.
• Entrepreneurs typically have a lower risk perception than others; their focus is primarily on opportunities for gain rather than avoidance of loss.
• Successful entrepreneurs understand that developing strong business networks is critical, and they proactively seek suitable partners who are trustworthy, complementary, and share their vision.
• Finding the right entrepreneurial partners involves avoiding similar and nearby connections/relationships to benefit from mutual differences.

Opportunities for Small Businesses

• Small businesses can capitalize on specialized market niches and personalized customer service, which are often better than larger companies.
• Lower overhead costs and effective use of technology give small businesses an edge.

Threats to Small Businesses

• High failure rates, lack of business knowledge and experience, and insufficient funds are common hurdles for small businesses.
• Overwhelming paperwork and regulatory burdens contribute to difficulties.

Role of Small Businesses in Canada

• Small businesses are significant sources of job creation and contribute substantially to Canada's national income.
• These businesses often serve as the drivers of innovation and export markets.

Successful Entrepreneurs

• Effective entrepreneurs share distinct, important attitudes and traits, such as vision, drive, and a unique approach to risk.
• These individuals exhibit meticulous planning and a dedicated commitment to their endeavors. Small businesses play a pivotal role in the Canadian economy.

Marketing

• A market consists of individuals with unmet needs and who are willing and able to buy products/services.
• Marketing involves comprehending needs, creating meaningful connections, and ensuring long-term profitability.
• Creativity is essential in modern marketing, enabling businesses to stand out by employing unique and clever strategies to create powerful advertisements or compelling marketing schemes.
• Marketing relies on market orientation, where businesses focus on gathering, sharing information about their customers and competitors, to create better products and relationships.
• Effective customer focus entails meeting or exceeding customer expectations, driving customer loyalty and word-of-mouth marketing to improve customer relations.
• Understanding consumer behavior, including demographics, psychographics, and purchasing situations, is crucial to tailoring marketing campaigns and strategies successfully.
• B2C (business-to-consumer) marketing focuses on consumer needs and their decision-making processes, while B2B (business-to-business) focuses on business needs.
• Key takeaways in marketing: Effective marketing involves understanding customer needs, delivering value, fostering relationships, and employing creativity, technology, and social media. Targeted segmentation and effective marketing strategies drive business success.

Product Life Cycle (PLC)

• Introduction: New products with low sales and low profitability.
• Growth: Rapid sales increases and growing profits.
• Maturity: Stable sales and market saturation.
• Decline: Falling sales and decreasing profits.

Pricing Strategies

• Competition-based pricing: Adjusts and matches competitor prices.
• Skimming pricing: Initially sets a higher price for new products (commonly used for new products).
• Penetration pricing: Uses low prices to quickly acquire customers and gain market share.
• Everyday Low Pricing (EDLP): Uses stable, low prices for all products.
• High-Low pricing: Prices some products low, while others remain at high prices/ premiums.

Place (Distribution)

• Place in marketing refers to the process and location where products are distributed to customers (location, channels, logistics).
• Distribution channels: The pathways from manufacturers to consumers. Examples include retail stores, online marketplaces, wholesale distributors, etc. 

Promotion (Marketing Mix)

• Promotion: The methods used to communicate the value proposition of products or services to target audiences. This includes advertising (informing or persuading consumers), public relations (managing public image), personal selling (interaction and relationships), and direct marketing.
• Key components of promotion include advertising, public relations, personal selling, and direct marketing (strategies to reach consumer target markets).

Fundamental Accounting Equation

•  Assets = Liabilities + Equity.
•  Assets: Resources owned by a business (e.g., cash, equipment, buildings).
•  Liabilities: Obligations a business owes to others (e.g., loans, accounts payable).
•  Equity: Residual interest in the assets of the business after deducting its liabilities (the owners' stake in the company).

Financial Statements

• Balance Sheet: Snapshot of a company's financial position at a specific point in time.
• Income Statement: Summarizes revenues and expenses over a period of time.
• Statement of Cash Flows: Shows the inflows and outflows of cash during a period of time.

Cost of Goods Sold (COGS)

• Represents the direct costs associated with producing or acquiring goods sold by a business.

Gross Profit

•  Gross profit is the difference between net sales and the cost of goods sold.

Operating Expenses

•  Operating expenses are the ongoing costs required to maintain the business's operations (e.g., rent, salaries, utilities).

Net Profit or Loss

•  Net profit is the difference between a company's revenue and all of its expenses for a given period.

Cash Flow Statement

•  Cash flows, which are important to understand, include operational activities, investing activities, financing activities, and the overall cash flow of a company over time)

Short-Term Financing

• Includes commercial finance companies, factoring, and commercial paper.

Long-Term Financing

• Focuses on long-term goals, funds needed, and suitable financing sources.
• Debt financing: Borrowing money with a repayment schedule and interest.
• Equity Financing: Selling company ownership with no repayment schedule.

Venture Capital and Retained Earnings

• Venture Capital: Funding for startups and high-growth companies.
• Retained Earnings: Reinvesting company profits.

Codes of Ethics

• Compliance-based: Emphasizes rules and penalties.
• Integrity-based: Promotes core values and shared accountability.

Corporate Social Responsibility (CSR)

• CSR is a company's responsibility toward society and includes ethical concerns (e.g., protecting the environment or treating employees well), wealth creation, and relationships with various stakeholders.

Corporate Philanthropy & Initiatives

• Business donations (e.g., to non-profit organizations, such as charities.)

Sustainable Development

• The integration of environmental, economic, and social factors into business decision-making.

Social Auditing

• A systematic evaluation of a company's social performance and commitment to society.

Environmental Issues

• Addressing pollution and environmental degradation is crucial in contemporary business environments.

International Ethics and Social Responsibility

• Fair trade is a social movement that ensures fair prices for goods produced in developing countries.

Business Regulations

• Legal frameworks related to corporations, mergers, and acquisitions.

Mergers & Acquisitions

• Two or more companies form a new entity.

Leveraged Buyout (LBO)

• A leveraged buyout involves a group of management/employees or investors borrowing money to take over existing company shares to own and control it.

Franchises

• Franchises provide a business model where different owners operate under one name and use a shared business model.

Liability (Business Structure)

• Liability refers to a business's legal responsibility to pay debts.
• Sole Proprietorship: Owners are legally obligated for business-related debt (unlimited liability).
• Partnerships: Owners may have unlimited or limited liability depending on the partnership structure.
• Corporations are separate legal entities from the owners; owners' personal assets aren't held responsible for business debts (limited liability).

Test your knowledge on essential traits of successful entrepreneurs and key marketing concepts. This quiz covers topics such as risk perception, intrapreneurship, and the differences between B2B and B2C marketing strategies. Perfect for anyone looking to deepen their understanding of entrepreneurship and marketing principles.