BA 101 Midterm 1 Study Guide PDF

Transaction An exchange, (profit) Contract A binding agreement to establish the parameters of the exchange Value Function (scarcity and need) Technological innovation Ralph invented better fishing nets to catch 10 times more fish Process Innovation To still compete with Ralph, you get up ea...

Transaction An exchange, (profit) Contract A binding agreement to establish the parameters of the exchange Value Function (scarcity and need) Technological innovation Ralph invented better fishing nets to catch 10 times more fish Process Innovation To still compete with Ralph, you get up earlier and fish with three poles Individual Self Interest... Competition The invisible hand of the market Requirements Private Property Freedom of Choice Fair Competition Right to keep my profits Inquiry into the nature and causes of the Wealth of Nations Adam Smith The Private Enterprise System Create Wealth Transactions Only will exchange when you are made better off (wealth) Competition to be a part of exchanges results in: Pressure for lower prices Pressure for new and improved products Pressure for more efficient ways to do things What is a Stakeholder Citizen, consumer, employee, business owner Shareholder Business owner, owns a share in a business Specialized Economy In a complex and specialized market, how can you be assured of success Uncertainty- not knowing how the market will respond Risk- Damage associated with bad outcomes Reward- potential gain from action or investment Why segway failed Hard to ride Heavy No specific targeted demographic/ no clear target market Owner fell off a cliff on a segway Expectations were too high Overdone PR Product not a solution Cities did not have proper infrastructure for them It was a invention but not innovation Unregulated, banned from sidewalks and roads in many countries How innovations succeed Experimentation, iteration, openness and collaboration What is different about the hoverboard that led to its success over the segway Target market More practical Became trending What did segway do after hoverboards came out? Filed a lawsuit and then reiterated their initial product First Mover & Fast Follower Segway\>Hoverboard\> Hybrid segway hoverboard contraption Management Process Planning Understand the task Design the product Design the process Organize: configure the resources- people, tools, material Operate: make it happen Areas of Management Marketing- know ur customers and serve them Production- build it at low cost Finance- arrange for tools and money to meet the goals of the company Administrative- Determine who the company is and what it wants to accomplish Asset Items (tangible or intangible) that have value In an economic sense, your knowledge, skills & abilities You will take these assets to the market in your career Economics Two Levels of Economics Macro- a nations economy as a whole Micro- the behaviour of people and organizations in markets for particular products Resource Development How to increase resources and create conditions that will make better use of them Ways to increase resources New energy sources New ways of growing foods New ways of creating goods and services- Nanotechnology Adam Smith's beliefs Freedom was vital to an economy's survival Freedom to own land or property and the right to keep the profits of a business is essential people will work hard if they believe they will be rewarded The invisible hand theory Capitalism State Capitalism When the state, rather than private owners, run some of the businesses. Countries that do this: Russia China Saudi Arabia 4 Rights of Capitalism Right to own private property Own a business and keep all of its profit Right to freedom of competition Freedom of choice Free Markets Decisions about what and how much to produce are made by the market. Consumers send signals about what they like Price tells companies how much of a product they should produce. Supply Curves Supply The quantities of products business are willing to sell at different prices Demand Curves Demand The quantities of products consumers are willing to but at different prices Equilibrium Market price (equilibrium point)- Determined by supply and demand , supply and demand are in balance Four degrees of competition Perfect competition vegetables Monopolistic competition Nike and adidas High barriers of entry Oligopoly Verizon at&T Tmobile Monopoly Comcast, pg&E Free Market Attributes Benefits: Provides opportunities for poor people to work their way out of poverty Limitations People may start to let greed drive them Two Major Systems Free Market Economies Command Economies Mixed Economies Some allocation of resources is made by the market some by the government Gross Domestic Product Total value of final goods and services produced in a country in a given year Price Implications Inflation General rise in prices of goods and services overtime Deflation Prices declining Consumer Price Index Monthly stats that measure the pace of inflation or deflation, computed by the government Business Cycles Periodic rises and falls that occur in economy overtime Four phases of long term business cycles: 1. Economic Boom 2. Recession 3. Depression 4. Recovery Fiscal Policy Monetary Policy National Deficits, Debt and Surplus National deficit National debt -the sum of the government's deficit overtime National surplus When the government takes more than it can spend Marketing Customer Relationship Era Customer Relationship Management (CRM) Whole Foods/ Amazon Example The Emerging Mobile Era Now: Want to interact anytime, anywhere Can I? want to use info in new ways For me: expect personalized experiences Simply: want all interactions to be easy Grocery shop from bed at 2 am Customer Perceived Value What are the 4 P's Product- characteristics Price- how much will they pay Place -- where will they buy my product Promotion- how do they learn about my product The Marketing Mix A unique blend of; Product distribution Promotion Pricing strategies Designed to produce mutually satisfying exchanges with a target market The role of Marketing Research Process of planning, collecting and analyzing Data relevant to a marketing decision Secondary Data- previously collected for any purpose other than the one at hand Primary Data- Info collected for the first time, used for particular issue at hand Observational Research People watching people People watching an activity Machines watching people Marketing Research: Segmentation Geography Demographics Psychographics Benefits Sought Usage Rate Selecting Target Markets (strategies) Target Market A group of people for which an organization: Designs, implemnts and maintains Consumer Behavior Processes a consumer uses to: Make purchase decisions Use and dispose of purchased goods or services Also includes factors that influence purchase decisions and the product use Demographic Segmentation Age Gender Income Family life cycle Marketing to Millennials Authentic content Inbound marketing from 'experts' Content marketing is enticing Collaboration Use\> ownership Mobile marketing Target social groups Be relevant and engaging Marketing to Gen Z: Involve them in the message Highlight Real People Connect with social responsibility Psychographic Segmentation Market segmentation on the basis of personality, motives, lifestyles Geodemographic Segmentation Market segmentation on the basis of neighborhood lifestyle categories (Priuses in Berkeley) Intermarket Segmentation 2 Groups Business to Consumer Business to Business Small Segments Niche Marketing Identify small but profitable market segments and design products for them One-to-one Marketing Develop a unique mix of goods and services for each individual consumer Cost Vs. Price Cost of Goods Expense of obtaining materials to produce a product Price That which is given up by the consumer in an exchange to acquire a product Profit Maximization Setting prices so total revenue is as large as possible relative to total costs Revenue Price x Units sold Service The service element can be particularly influential for commodity 'products' Commodity products Similar to each other without meaningful differentiation Service Total Product Offering Everything consumers evaluate when deciding whether to buy something or not Product Lines A group of products that are physically similar or intended for a similar market Product Mix Combination of all product lines offered by a manufacturer or service provider Product Differentiation Creation of real or perceived differences Pricing, advertising, packaging to create different images Water, Aspirin, Vodka, Detergent Positioning Brand meaning perceived by the target market in terms of: Other competing products Perceived product characteristics Example Smirnoff(party), belvedere (bougie) Product Bundling Grouping two or more products together and pricing them as a unit Virgin air Limo+ massage with purchase of flight Financial institution Advice + Purchases Break Even Analysis Breakeven Point Cost and income are equal Total Fixed Costs All costs that remain the same no matter how much is produced or sold Variable Costs Costs that change according to level of production BE= [Fixed Costs] Advantages of break even Quick Assessment of potential Identifies finite 'target' number in revenue or units Shortcomings of Break- Even Brand is The entire organization as seen through the eyes of your stakeholders A name or symbol, or design that: Identifies the goods and distinguishes from competitors offerings Trademark A brand that has exclusive legal protection for both its brand name and design Brand Equity The value of the brand name and associated symbols Brand Loyalty The degree to which consumers are satisfied and committed to further purchases Brand Awareness Product Life Cycle A theoretical model of what happens to sales and profits for a product over time 1. Introduction 2. Growth 3. Maturity 4. Decline Marketing Channels Marketing Intermediaries Channel of Distribution Wholesaler Retailer Sells products to customers Intermediaries offer value Perform marketing tasks More quickly Lower cost Make markets more efficient by Reducing transactions Reducing contacts Retail Distribution Strategies Intensive Distribution Puts products in as many retail outlets as possible Selective Distribution Uses only a preferred group of available retailers Exclusive Distribution Uses only one retail outlet in a given geographic area Direct Selling Selling in a customers home or their workplace Vacuums, Tupperware, make up Multilevel Marketing Using salespeople who work as independent contractors Tiktok leggings, knives Direct Marketing Manufacturer or consumer linked directly to consumer Integrated Marketing Communications Combines promoting tools into one comprehensive strategy. IMC is used to: Create a positive brand image Meet the needs of consumers Meet strategic marketing and promotional goals of the firm Viral Marketing \#\#\# 50-Question Multiple Choice Test \#\#\#\# Transaction, Contract, and Value 1\. A transaction is best defined as: \- a) An agreement between two parties \- b) An exchange, usually for profit \- c) A service provided without compensation \- d) The price paid for a good 2\. A contract is: \- a) A way to compete in the market \- b) A binding agreement that sets parameters for an exchange \- c) A plan for future transactions \- d) A verbal understanding between two individuals 3\. What two factors primarily influence value in an economic sense? \- a) Quality and brand \- b) Scarcity and need \- c) Price and supply \- d) Competition and profit \#\#\#\# Technological and Process Innovation 4\. Ralph\'s invention of better fishing nets represents: \- a) Process innovation \- b) Technological innovation \- c) A stakeholder engagement \- d) A market failure 5\. To still compete with Ralph, if Erik decides to fish earlier using multiple poles, this is an example of: \- a) Process innovation \- b) Technological advancement \- c) Market intervention \- d) Private enterprise \#\#\#\# Competition and Market Forces 6\. What concept is referred to as \"the invisible hand\" in economics? \- a) Government intervention \- b) The invisible work of stakeholders \- c) Market competition that self-regulates \- d) Monopoly formation 7\. Private property, freedom of choice, and fair competition are requirements for: \- a) State capitalism \- b) The private enterprise system \- c) Monopolistic competition \- d) A free market \#\#\#\# Adam Smith and Wealth of Nations 8\. Who authored \"An Inquiry into the Nature and Causes of the Wealth of Nations\"? \- a) Karl Marx \- b) Milton Friedman \- c) Adam Smith \- d) John Maynard Keynes 9\. Adam Smith's invisible hand theory suggests: \- a) Government should control markets \- b) Self-interest indirectly benefits society \- c) Businesses should always collaborate \- d) People should work for the greater good directly \#\#\#\# Stakeholders and Shareholders 10\. A stakeholder includes all of the following except: \- a) Citizen \- b) Business owner \- c) Employee \- d) Competitor 11\. A shareholder is: \- a) An employee who earns company profit \- b) A business owner who owns a part of the company \- c) A person who buys a company's products \- d) A stakeholder with no voting rights \#\#\#\# Market Structures and Competition 12\. Which of the following represents perfect competition? \- a) Verizon, AT&T, and T-Mobile \- b) Comcast, PG&E \- c) A vegetable market \- d) Nike and Adidas 13\. An oligopoly is characterized by: \- a) Many small firms competing \- b) One company controlling the market \- c) A few large firms dominating the market \- d) No barriers to entry \#\#\#\# Economic Systems and Free Markets 14\. Capitalism is a system where: \- a) The government controls all means of production \- b) Private individuals own and operate businesses for profit \- c) Prices are set by the government \- d) Everyone earns the same wage 15\. In a command economy: \- a) The market determines how goods are distributed \- b) The government largely controls what goods are produced \- c) Businesses freely compete without restrictions \- d) Consumers determine product pricing \#\#\#\# Innovations and Market Failures 16\. Why did the Segway fail as a product? \- a) It was too easy to ride \- b) Cities lacked infrastructure for it \- c) Its PR was minimal \- d) It had no clear competition 17\. The hoverboard succeeded over the Segway because: \- a) It was easier to use \- b) It targeted a specific demographic \- c) It was heavily regulated \- d) It was heavier and more stable \#\#\#\# Management and Market Uncertainty 18\. Managers in a competitive market rely on which of the following to address uncertainty? \- a) Innovation \- b) Planning, organizing, operating, and controlling \- c) Government regulation \- d) Stakeholder engagement 19\. Which function of management involves creating and executing a plan to achieve company goals? \- a) Operating \- b) Organizing \- c) Controlling \- d) Planning \#\#\#\# Economic Concepts and Principles 20\. Macro-economics studies: \- a) The behavior of people and organizations in markets for specific products \- b) Individual consumer choices \- c) A nation\'s economy as a whole \- d) Small, localized economic factors 21\. Adam Smith believed that freedom is essential for: \- a) Fair wages \- b) Economic prosperity \- c) Employee satisfaction \- d) Government regulation \#\#\#\# Price Mechanisms and Curves 22\. The supply curve represents: \- a) The quantity of products consumers are willing to buy at different prices \- b) The market price of goods \- c) The quantity of products businesses are willing to sell at different prices \- d) The minimum price a business is willing to sell a good for 23\. Equilibrium in the market occurs when: \- a) Demand exceeds supply \- b) Supply and demand are balanced \- c) Consumers control the price \- d) Businesses dominate the market \#\#\#\# Business Cycles and Fiscal Policy 24\. A recession is characterized by: \- a) A general rise in prices \- b) Economic growth and prosperity \- c) A decline in economic activity \- d) High inflation rates 25\. Fiscal policy involves: \- a) Managing interest rates \- b) The government controlling business operations \- c) The government adjusting taxes and spending to stabilize the economy \- d) Printing more money to counter inflation \-\-- \#\#\# Answer Key: 1\. b 2\. b 3\. b 4\. b 5\. a 6\. c 7\. b 8\. c 9\. b 10\. d 11\. b 12\. c 13\. c 14\. b 15\. b 16\. b 17\. b 18\. b 19\. d 20\. c 21\. b 22\. c 23\. b 24\. c 25\. c