IB Business and Management

marketing
management process involved in identifying, anticipating, and satisfying customers profitably
product orientation
businesses focus on the production process and the products itself
market orientation
businesses that continually identify, review, and analyze consumers needs
asset-based marketing
a business develops goods and services that make the best use of its strengths
desk research
involves the use of secondary data
secondary data
information which already exists in some form
field research
collecting primary data; must be collected by the researcher
primary data
data that does not already exist
niche marketing
aims at a tiny segment of the market
repositioning
occurs when there is a shift in consumer demand
marketing mix
elements of a firm’s marketing strategies which are designed to meet the needs of customers
the 4 p’s of the marketing mix
product, price, promotion, place
extension strategies
used to hopefully delay the decline in sales
product portfolio (mix)
the amount of products that a firm is selling at a given time
price sensitivity
how demand will be affected by price
price elasticity of demand (PED)
sensitivity of quantity demanded to changes in price
above the line promotion
using TV and newspapers
below the line promotion
direct method of promoting
informative advertising
designed to increase consumer awareness of the product
persuasive advertising
influence people to purchase a product by stressing that it is more desirable than others; often used to promote a company instead of a product
corporate advertising
promoting a company instead of a product
channel of distribution
route taken by a product as it passes from the producer to the consumer
three pricing methods
cost-based pricing, market oriented pricing, competition-based pricing
cost-based pricing
set with intent to cover costs
market oriented pricing
set with the market in mind
competition-based pricing
prices are influenced by competitors
contribution pricing
method of pricing takes into account that different products might need to be priced using different criteria
penetration pricing
used when trying to gain a foothold in the market
destroyer pricing
eliminate the opposition
the uses of marketing research
descriptive reasons, predictive reasons, explanatory reasons, exploratory reasons
descriptive reasons
identify what is happening in its market
predictive reasons
predict what is likely to happen in the future
explanatory reasons
explain a variety of matter related to its marketing; to find out why things are happening
exploratory reasons
investigating new possibilities in a market
targeting the market
selecting a particular group to concentrate on
ways to target the market
undifferentiated marketing, differentiated marketing, concentrated marketing
undifferentiated marketing
aimed usually at the whole market; expensive
differentiated marketing
involves different products to different groups or changing the means of promotion
concentrated marketing
specific section of the market specific product
business position products
benefits, unique selling proposition (USP), product attribute, product origin, product classification
unique selling proposition (USP)
what sets the product apart from competitors
product life cycle
development, introduction, growth, maturity, saturation, decline
boston matrix
high market share and high market growth- star
high market share and low market growth- cash cow
low market share and high market growth- problem child
low market share and low market growth- dog
wholesaler
link between producers and retailers
retailers
can deal with a wholesaler, or directly with the producer of the product
agents
link between those providing a good or service and those wishing to buy them
methods to entering international markets
exporting, franchising, licensing, joint ventures, direct investment, mergers or takeover
ansoff matrix
measures the growth of a business
existing market and existing product- market penetration
existing market and new product- product development
new market and existing product- market development
new market and new product- diversification
factors of production
land, labor, capital, enterprise
land
natural resources can be used from the land, rent
labor
the workforce of a business
capital
artificial resource made by labor
enterprise
entrepreneur develops a business idea, hires and organizes the other three resources to carry out the activity
two groups of goods
durable goods, non-durable goods
durable goods
goods that won’t expire
non-durable goods
goods that will expire
classification of business activity
primary, secondary, tertiary
primary
take natural resources from earth
secondary
manufacturing, processing and construction
tertiary
services
franchiser
the parent company
franchisee
sells the product
stakeholder
anybody that has an interest in the business
interdependence
managers/employees/suppliers/consumers all depend on each other
management buy-out
management buys out the owner with personal funds or bank loans or perhaps venture capitalists
venture capitalist buy-out
might be called a leveraged buy-out; many occur when restructuring, family demise, avoiding bankruptcy
management buy-in
outside management team takes over a business
mission statement
short statement that lists broad objectives, or an overall theme for the entire business
basic economic problem/scarcity
not enough resources to fulfill the needs and wants of society
opportunity cost
the benefit lost from the next best alternative; what you have to give up, to get what you want or need the most
corporate culture
the values, beliefs, and norms that are shared by people and groups in an organization
strategy
the pattern of decisions and actions that are taken by the business to achieve its goals and objectives
planning
planning is the process of deciding, in advance, what is done and how it is to be done
competitive advantage
internal analysis; might examine the strengths of the business which give it a competitive advantage over rivals, such as the skills of its workforce
contendency plan
back up plan if the first attempt fails or problems occur; to fix the crisis
outsource
when a business gives some of its work to other producers to help prevent interruptions in production
three questions to answer when dealing with the basic economic problem
what should be produced?
how should it be produced?
For whom should it be produced?
three types of economies
market, planned, mixed
three types of decisions
strategic, tactical, operational
strategic
general direction and overall policy of a business; long-term (the outcome will not be know for more than 1 year); higher risk (because of uncertainty); upper level management (owners) make these types of decisions
tactical
calculated; outcome is more predictable than a strategic decision; short-term; less risk; middle level management (store managers) will make these decisions
operational
administrative; short-term decisions that are made often within the course of a day; low risk; made by all types of employees
methods of finance for an expanding business
private funds, partners/shareholders, bank loans, asset leasing and hire purchase, venture capital/business angels, merger capital, retained profits
SWOT analysis
S- strengths
W- weaknesses
O- opportunities
T- threats
strengths and weaknesses are internal factors of the company; opportunities and threats are external factors towards the company
PEST analysis
P- political
E- economical
S- social
T- technical
examines external and global factors more than internal factors
downsizing
creating a flatter organization structure normally cutting out middle management
organizational chart
illustrate the structure of the business
chain of command
order of levels of a management firm
span of control
number of people working under someone
centralization
when only top level managers have all authority
delegation
when lower lever managers would have total authority
delegating
handing out authority to someone working under you
responsibility
being accountable or being able to justify an action
authority
the ability to carry out a task
human resources
the people that work for a business
job enlargement
more responsibility in a similar nature
job rotation
changing jobs or tasks from time to time
job enrichment
vertical expansion in the production process
multiskilling
enhancing the skills of employees
quality control circles
small groups in the same work area that have scheduled meetings about problems and how to fix them
empowerment
delegating more power to employees
workforce planning
planning on how many employees will be needed in the future with regards to retirement, vacancies, expansion
forecasting
using relative information to predict how many jobs will be needed
adapters
solve problems by using existing or slightly modified approaches
innovators
different and unexpected ways of solving problems; in reality, most business people have a combination of both approaches
emotional intelligence
the ability of a person to sense and understand their own and others emotions and to apply that understanding to achieve an outcome
forms of business structure
entrepreneurial structure, pyramid structure, bureaucratic structure, matrix structure
entrepreneurial structure
decisions made centrally; small businesses or businesses with constant extreme deadlines
pyramid structure
decision making shared through business; levels of management
bureaucratic structure
individuals within teams (groups) have their own responsibilities; works well for projects or tasks, but slow in final decision making
matrix structure
a support system that focuses on the individual
Maslow’s hierarchy of needs
can’t have higher level, or class without the lower level; physiological needs, safety needs, feeling of love and belonging, esteem needs, self-actualization
theory x
Douglas McGregor; people are lazy
theory y
Douglas McGregor; people are internally motivated
Herzberg’s two-factor theory
motivator and hygiene factors need to be met to prevent dissatisfaction
organization behavior modification
positive reinforcement, negative reinforcement, punishment
positive reinforcement
rewarded for good performance; something the employee likes is praised
negative reinforcement
something that the employee dislikes is taken away
punishment
something the employee likes is taken away or something the employee dislikes is given
payment schemes
time rates, annualized hours, piece rate, commission, fee, fringe benefit
time rates
salaries, wages, overtime
annualized hours
work so many hours a year
piece rate
the more you produce or make, the more money you get
commission
paid percentage of the revenue you bring in
fee
one time payment
fringe benefit
payments other than wages or salaries, other benefits
any incentive scheme should consider these 5 principles
principle of closure, control and monitoring, task variety, self regulation, interaction and cooperation
formal/informal communication
line, staff, lateral
line
has authority behind it
staff
persuasive but without authority
lateral
when people communicate within the same level
communication networks
circle, chain, wheel, connected
circle
departments can communicate with only two others
chain
one person passes information to others
wheel
a person, group or department that occupies a central position of communication
connected
good for brain storming and bouncing ideas around
types of personalities
type A, type B
type A
competitive; high need for achievement
type B
easy going
types of people effective groups have
idea person, energy person, logical thinker
group development stages
Tuckman and Jensen; start out form, storming, group norming, perform, break up