1.-4. anyag Flashcards
The importance of economic indicators
Insight into Economic performance
Assessment of Economic health and strength
Informed Decisions
It measured the total value of all the finished goods and services produced within a country‘s borders in a specific time period
GPD
Compared the year-over-year change in a country‘s economic output to measure how fast an economy is growing
GDP growth rate
It is a measurement of the GDP per person in a country‘s population.
It indicates the amount of output or income per person in an economy.
GDP per capita
It is adjusted to inflation in its measurement of economic growth.
Used by policymakers to determine growth over time by comparing GDP from different time periods.
Also compare the growth rate of similar economies with different rates of inflation.
Real economic growth rate
Real DPD=
GDP/(1+inflation since base year)
Designated year, updated periodically by the government and used as a comparison point for economic data such as the GDP
base year
GNP
Gross national product
It is the value of all finished goods and services produced by a country’s citizens both domestically and abroad.
Measures how much of the value stays in the country.
GNP
It is a sum of all income earned by citizens or nationals of a country, regardless of whether the underlying economic activity takes place domestically or abroad
GNI
GNI
Gross national income
UN
Human development index
Measure the countries‘ social and economic development
UN
UN: 4 areas of interest
Mean years of schooling
Expected years of schooling
Life expectancy at birth
GNI per capita
Refers to a situation where a person active searches for employment but is unable to find work.
= Unemployed people / number of people in the labour force
Unemployment rate
Labour force=
The employed + the unemployed
Unemployment types
Classical
Seasonal
Cyclical
Frictional
Structure
Hidden
Calculated as the average price increase of a basket of selected goods and services over one year
Inflation rate
Annual consumer price index (CPI) =
(Value of basket in current year / value of basket in prior year) x 100
Inflation rate =
(New CPI - prior CPI / prior CPI) x 100
Normally associated with periods of expansion in the business cycles and high employment
2-3% inflation
Moderate inflation
A rapid and accelerating increase in in the general price level of goods and services in an economy
Galloping inflation
A period of fast-rising inflation
Hyperinflation
Economic stagnation combined with inflation
Stagflation
Prices decline and purchasing power increases, negative inflation
Deflation
Prices continue to increase but at a slower rate
Disinflation
Results from the general increased in the costs of the factors of production, the inputs required to produce goods and services
Cost-push Inflation
An excess of aggregate demand relative to aggregate supply
Demand-pull Inflation
A charge to the borrower for the use of an asset
Interest
The interest rate at which a nation’s central bank lends money to domestic banks
Base rate / (central) bank rate
Loan used to purchase real estate
Mortgage
Times of rising economic output, increasing profits, rising demand -> rising prices, growing interest rates
Expansions, upturns
Long period of expansion
Boom
The biggest point of economic growth
Peak
Times of decreasing profits and lower output
Contraction, downturn
Significant, widespread, and prolonged downturn in economic activity
Recession
A severe and prolonged downturn in economic activity
Depression, slump
The lowest point of negative economic growth
Trough
The most probable cause is people‘s spending or consumption decisions, which in turn are based on future expectations
Endogenous theory
Global economic changes
Natural disasters
Elections or political shocks
Demographic changes
Scientific advences - creative destruction
Exogenous theory
4 p‘s
Product
Price
Place
Promotion
Divide the market into distinctive groups of buyers who have different needs based on age, income, social class, lifestyle, geographical location, etc
Market segmentation
Choosing the most profitable segment, focusing on a narrow segment/target group
Niche marketing
Bought with a minimum of comparison and buying effort
Convenience goods
Bought on a regular basis
Staples
Bought without planning
Impulse goods
Sell quickly, relatively low cost
Fast moving consumer goods (FMCG)
Bought by final consumers for personal consumption
Consumer goods
The consumer puts more buying effort into the purchase, checking quality, suitability, price
Shopping goods
High value, luxury goods
Speciality goods
The buyer is unaware of, or would prefer not to think about buying
Unsought goods
A branding strategy promoting the name of the company to market it’s products
Philips
Corporate branding
The company brands each product line individually
Coca-cola: Fanta, fuse tea, sprite
Individual branding
How familiar are consumers with a brand
Brand awareness / recognition
A consumer purchases a given brand without considering alternatives
Brand loyalty
Consumers are not loyal to a given brand
Brand switching
Represents the value of a brand
Brand equity
Created by the reseller
Private brand / own-brand
Brand name becomes a product name or products that are not branded
Generic brand / product, generics
When a brand is given legal protection
Trademark
To replace a basic model with a more expensive one
Trade up
To replace an expensive model with a cheap one
Trade down
Cheapest price
Low-priced model
Low-end / bottom-end product
Entry-level model
Downmarket
High-priced Model
High-end / Top-end product
Upmarket
Priced between low-end and high-end product
Mid-priced models are mid-range
Recommended by the manufacturer
Recommended retail price
List price
Difference between the buying and the selling price
Profit margin
A low price used when the product is launched
Introductory offer
Launch price
Early bird price
Calculating the cost and adding a markup
Cost-plus pricing
Calculating the price on what the customer believes it is worth
Value-based pricing
Set a low price to enter a competitive market and raise it later
Penetration pricing
To sell something below cost to create store traffic
Loss leader pricing
Sales promotion efforts to stimulate demand
Promotional pricing
Set a high price and lower it as the market evolves
Price skimming
Using high prices to suggest quality and exclusivity
Prestige pricing
Two or more products are combined in the same package
Product bundle pricing
Bundled pricing
Basic product is relatively cheap, components are expensive
Captive product pricing
Selling directly to the consumer without a middleman / intermediary
Direct distribution
Direct marketing
Marketing product through a distribution channel (resellers)
Indirect distribution
Selling products usually in large quantities to the retailer
Wholesaler
Selling products to the end-user (consumer)
Retailer
Part of a group of shops
Chain store
Retail store
Small shop in a residential area
Convenience store
Large shop selling mainly food
Supermarket
Large shop selling food and non food items
Hypermarket
A group of retail stores and service establishments
Shopping Center
Mall
Grant a license to the franchisee
Franchisor
Manufacture / market the franchisor products or operate his services
Franchisee
On-off franchise payment
Franchise fee
Front end fee
An shred percentage of the revenue of franchise
Royalty
Management services fee
Selling on the internet
E-commerce operations
E-tailing
Only online operations, seller
Pure play online seller
Combination of online and offline operations, sells
Click and mortar shops
Only offline operations, sells
Brick and mortar shops
A deficit in a bank account by drawing more money than the debit card holds
Overdraft
Selling to the public
B2C Business to Consumer
Firms ordering supplies on the internet
E-procurement
B2B Business to business
Communication with government departments, apply for contracts, pay taxes
B2G Business to government
Tv, press, Print, Radio, Outdoor, online
Pay for space
Above the line
Sales promotion, pr, personal selling, word-of-mouth
Pay a fee
Below the line
Direct marketing, combination of above and below the line
Through the line
Communication channels that a company owns - website, blogs, email, newsletter, forum, social media
Owned media
Free coverage the brand receives - reviews, recommendations, sharing content, links
Earned media
The company pays for promotion
Paid media
Promotion of goods and services through the mass media
Advertising
Face to face interactions with the consumers
Personal selling
Short-term incentives to encourage the purchase or sale of a product or service
Sales promotion
Building good relations with the company’s various publics
Public relations
Advertising- Factual information about price, quality product benefits
Informative advertising
Advertising- Convince consumers to buy the product
Persuasive advertising
Advertising - Contrasting the product with competing offers
Comparative advertising
Advertising - promote the image of an organisation
Image advertising
Advertising - reminds consumers of previous advertising
Reminder advertising
Advertising - to promote issues of social interest
Public service advertising (PSA)
Advertising - communication false information
Deceptive advertising
Distributing free trial amount of the product
Free samples
Sampling
Price-off Deal
Special offer
Discount
Provide a saving
Coupon
Giving points for purchase, redeemed later
Loyalty card
Consumer can win something
Competition
Sweepstakes
Buy one get one free
BOGOF
When you buy one product, you are recommended to buy another that goes with it
Cross promotion
