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BA 101 > BA 101 Midterm > Flashcards

BA 101 Midterm Flashcards

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1
Q

Know your customers and determine how to best serve them

A

marketing

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2
Q

Marketing Mix

A

 Product
• Is a product being offered with attributes the target market is willing to pay for?
 Price
• The amount of money customers pay for a product
 Place
• Where do customers go to buy the product
 Promotion
• Advertising
 Service
• Customer service

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3
Q

How many units of product can the factory produce

A

Capacity

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4
Q

not being able to produce enough for customers

A

Stocking out

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5
Q

How much labor/automation is needed?

A

a combination of the two

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6
Q

• Expensive (salary, benefits, etc.)
• Very flexible in terms of increasing or decreasing
o Does not cost much to add or reduce this type of labor

A

Direct labor

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7
Q

• No salary, benifts – less expesnisve
• Not flexible
o Cost a lot initially
o Hard to get rid of

A

Automation

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8
Q

 Where do companies get money to start and operate

A

Finance

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9
Q

Three sources of money

A

 Take on debt (Loans or bonds)
 Issue stock (investors/owners)
 On going operations of the company (Retained earnings)

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10
Q

o What if? (Before making a change)
 Proforma – what if scenarios
o What happened? (After making a change)
 Helps to learn from mistakes

A

Accounting

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11
Q

Creates and issues Income statement, balance sheet and cashflow statement.

A

Accounting

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12
Q

who hires the people needed to operate a factory

A

Human resources (Hiring people)

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13
Q

An organizational function and a set of process for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

A

Marketing

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14
Q

Marketing mix should fit___

A

customers needs

Know you target market

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15
Q

Can specifically create a market mix tailored to that customer

A

Target Market

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16
Q

Needed to determine return (size, is it profitable?….) and what kind of marketing mix to develop.

A

Target Market

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17
Q

 Everybody
 Companies do not develop the marketing mix for the mass market
 To market for the mass market companies have many target markets

A

Mass Market

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18
Q

Companies do turn target markets into____markets

A

Mass

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19
Q

Revenue (sales) – expenses (costs) =

A

Profit

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20
Q

Are the revenues large enough to pay for the marketing mix?

A

…

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21
Q

public information that is free or given at a fee, data previously collected for any purpose other than the one at hand

A

Secondary data

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22
Q

information collected for the first time. Can be used for solving the particular problem under investigation

A

Primary Data

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23
Q

segmentation

A 
	Geography 
•	Location 
	Demographics
•	Gender, age and income
•	Can be measured   
	Psychographics
•	Attitude, lifestyles and beliefs
•	Cannot be measured   
	Benefits sought 
•	What do they want from buying this product
	Usage rate
•	Light users vs heavy users
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24
Q

The process of grouping customers into market segments according to the benefits they seek from the product

A

Benefit segmentation

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25
Q

• Attributes (customer Value Assessment)

A

 Price
 Age
 Reliability
 Positioning

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26
Q

o The activities designed to provide goods and services that provide value and satisfy customers.

A

Marketing

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27
Q

o 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 the product use.

A

Consumer behavior

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28
Q

o Represent market research that has been done for you
 Foundation will always give this score
 Must be better than everyone else

A

Attractiveness scores

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29
Q

MTBF (Mean Time Before Failure)

A

o The higher the MTBF the more attractive
o Low tech – 20,000 = attractiveness score of 100
o Low tech 14000-20000 21%
o High tech 17000-23000 13%

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30
Q

 The expense of obtaining materials for making the products sold
• Manufacturing

A

Cost of goods

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31
Q

given up in an exchange to acquire a good or service

A

price

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32
Q

Price stats for foundation

A

Low tech 15-35 41%

High Tech 25-45 25%

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33
Q

A combination of the size and speed

A

Position

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34
Q

setting prices so that total revenue is a large as possible relative to total costs

A

Profit Maximization (To maximize the wealth of the owners)

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35
Q

What are the characteristics of the product that are important to customers?

A 
	Size 
	Performance (processing speed)
•	Overtime your target market demands smaller and faster products 
	Reliability (MTBF)
	Age: how recently has it been updated
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36
Q

What is the price low tech customers are willing to pay?

A

15-35$

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37
Q

What is the price high tech customers are willing to pay?

A

25 – 45 $

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38
Q

 Create a company that will allow you to compete on price (lower your prices) and still meet your performance targets
 Lower your material costs
 Lower your labor costs

A

strategy

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39
Q

Positioning (date)

A

The repositioning date will cut the age in half of your product

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40
Q

Promotion =

A

your message

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41
Q

Awareness =

A

percent of the market that received the message

42
Q

The most invested the higher awareness returned but it will eventually cost more because more and more people become aware

A

Diminishing return

43
Q

Managing Low Tech products

A

o Price: As much as you can and still meet your goals with the consideration that price competition requires efficient production
o Revise: Only to manage the age (ideal = 3)age range over the year: 2-3 or 3-4
 Revise every 2 years (revision date –age = 4)
 Make 1.0 unit faster, 1.0 unit smaller
o MTBF: Never above 20,000 (

44
Q

Managing High Tech products

A

o Ideal spot is most important -revise every year to keep it on or near the ideal:
 .7 units faster and .7 units smaller
o Age is 2nd most important -revise every year to keep it as young as possible
o Price is 3rd important -charge as much as you can and still meet your sales goals
o MTBF set it at 23,000 hours and leave it alone

45
Q

Trade offs (Higher price)

A

Fewer People buy - make more money on each

46
Q

Trade offs (Lower Price)

A

More people buy - makes less money on each

47
Q

Trade offs (new product)

A

Expense of new development - new customers

48
Q

Trade offs (old products)

A

Loss of appeal - no risk

49
Q

Low Tech Position

A

.5 faster and .5 smaller each year

50
Q

Contribution Margin

A

the difference in sales and variable costs

51
Q

Promotional mix

A

o You will invest money in promotion and create awareness

o It relates to your advertising efforts

52
Q

• Customer survey score creates _____?

A

Demand

53
Q

your message

A

promotion

54
Q

 Percent of the market that received the message
 Loses 33% each year
 Example of diminishing return

A

awareness

55
Q

when supply is less than demand –you can price your product up to $9.99 above the price range and it will still sell at the same volume.

A

In a sellers market

56
Q

o Limited supply is available due to stock outs
o Customers search for any available products and reduce their expectations
o Products priced up to $9.99 above the price range will sell. (Not at or above $10.00)
o A seller’s market changes the volume and the outcome may be different than the sales forecasts.

A

sellers market

57
Q

o There is plenty of product available.
o Customers will be selective about the products they buy.
o Sellers must make products as appealing as possible and priced right.
o Sales will decrease 10% for every dollar over the range.
o A buyer’s market may be more predictable based on demand, market share forecasting, and customer buying behavior.

A

buyers market

58
Q

o Actual is less than demand

o You can raise selling price up to 9.99

A

sellers market

59
Q

actual and demand are equal

A

Buyers market

60
Q

Market share formula

A

company sales / industry sales

61
Q

o For each product, take the number your company sold in the low tech segment and increase it by the growth rate for the upcoming year -10% or 9.4% or …
o For each product, take the number your company sold in the high tech segment and increase it by the rate for the upcoming year -20% or 19.5% or …
o If a product sells in both, take the number sold in the segment, increase each by the growth rate, and add the two together.

A

market growth estimate

62
Q

o Take the “Total Industry Unit Demand” and increase it (10% or 20%) this is the DEMAND for low tech products next year.
o Take each product’s “Potential Market Share” from the reported year and multiply it by the DEMAND.
o Gives you a potential share estimate
o Total industry demanded * market share estimate

A

market share estimate

63
Q

o Calculate the total DCS score … this is the base number
o 1. Total the DCS scores:28+20+23+18+20+1+1= 111
o 2. Divide Able’s DCS by the Total DCS:28 / 111 = 25.2%
 This is your DCS share
 CSS drives demand

A

DCS

64
Q

stakeholders are

A 
Owners
Employees 
Customers
Citizens (government that represents their interests)
Creditors and financial institutions
65
Q

These groups use accounting information to determine the degree to which the company is meeting its responsibilities

A

stakeholders

66
Q

management accounting

A

helps managers with company operation

67
Q

income statement

A

o Bottom line is net income
o Total Revenue – Total costs = profit / net income
o Prift in a given time period
o
o Total revenue pxq
o -Variable costs (vary with # of units produced) (COGS)
 Direct labor, raw materials
o Contribution margin (Gross profit)
o Utility, salary, rent, advertising and promotions (fixed costs)
 Do not vary with # of units produced, although they do change
o Depreciation (income statement)

68
Q

Net income can be issued as dividends to the owners or _____ which is called ____

A

reinvested into the company

69
Q

Accounting equation (for the balance sheet)

A

assets = liabilities + owners equity

70
Q 
o	Accumulated assets and liabilities 
o	Accumulated wealth of the company 
o	Assets 
	Cash 
	Inventory 
	Accounts receivable
•	Money not yet received  
	Equipment 
	Building 
	Land 
	Accumulated depreciation 
•	All the depreciation added up from all previous years 
o	Liabilities 
	Debt
	Accounts payable 
o	Owners’ equity 
	What the owners own
	Retained earnings = starts from the beginning 
	Common stock = The amount of capital invested by shareholders in the company
A

balance sheet

71
Q

The value of the stuff the organization controls

A

Assets

72
Q

The debt claims against the stuff

A

Liabilities

73
Q

Owners Equity

A

The owners claims

74
Q

 Cash
 Accounts receivable
 Inventory

A

current assets

75
Q

 PP&E

 Depreciation

A

fixed assets

76
Q

 Accounts payable

 Current debt

A

Current Liabilities

77
Q

Common Stock

Retained earnings

A

Owners equity

78
Q

the story of transactions over a specific time period

A

Income statement

79
Q

Revenue transactions

A

business and its customers

80
Q

expense transactions

A

Business and its suppliers – such as resources, people and capital

81
Q

The difference between Revenue and expense

A

Net Income is also Profit (loss)

82
Q

 The more you make the greater the cost
 Labor used to make a product or service
 Material use to make a product or service
 Cost of keeping inventory

A

Variable costs

83
Q

 The cost of being in business that month
 Selling expenses
 Administrative expenses

A

Fixed costs

84
Q

If the company reinvests the income it is called ________

A

retained earnings

85
Q

If the company give income to owners…

A

 Dividend to the stockholders

 Income to partners or sole proprietor

86
Q

Contribution margin pays…

A

fixed costs

87
Q

How much inventory do you want left?

A

> 0 ≤ 2 months available for sale

88
Q

Production forecast

A

 Forecast + (forecast/12) = available for sale (adds a 13th month)
 Subtract last year’s inventory before you determine how many to produce

89
Q

o Manage Production Efficiently 1 Star –3 points Contribution margin >30%
o Manage Cash (don’t run out)1 Star – 3 points Emergency Loan = $0
o Manage Inventory1 Star – 3 points Inventory >0 and <60 days (total / 6)
o Create Wealth; Make Profit 1 Star –3 points Net Income > $0
o Increase Owners’ Wealth 1 Star –3 points Stock price increase

A

Performance targets

90
Q

The cost to make one sensor

A

unit cost

91
Q

the cost of the stuff you use in your sensor smaller, faster, more reliable = higher cost

A

material cost

92
Q

The cost to assemble your product

A

Labor cost

93
Q

 Bigger size
 Slower performance
 Lower reliability = MTBF 20,000
 Material costs are lower

A

low tech

94
Q

 Smaller size
 Faster performance
 Higher reliability = MTBF 23,000

A

High tech

95
Q 
o	Revenue (price x units sold)
o	Gogs (unit cost x units sold)
o	Contribution margin (Rev-COGS)
A

Income statement

96
Q

o Too little inventory –Sell all the sensors you make = STOCK OUT lost sales & opportunities = bad management
o Too much inventory –Inventory is expensive and it ties up cash, plus the product “ages” and is less desirable
o Just right –1 or more units left Less than 60 days (production scheduled/6)

A

Inventory

97
Q

o Don’t Stock out.
o Have at least 1 unit left in inventory.
o No more than 60 days of sales left in inventory.
o Divide by 6
 You do not want more than that much of inventory let

A

Inventory

98
Q

How many products should I make available for sale?

A

Make your best sales estimate and add a “13thmonth” to provide an additional cushion.
 This puts you in the MIDDLE of the 60 day cushion

99
Q

o Uncertain due to past ambiguous information to predict a future that has change
o Important because a lot depends on it
 How many to produce
 If I need to invest in capacity next year
 Financing requirements
• Cash managements
• Capital investments

A

FOrecast sales

100
Q

o Forecast annual sales
o Add 13th month to get “units available for sale” (Meets Inventory targets)
o Subtract current inventory amount from “units available for sale”
o Balance is # of units to produce.
o Check production capacity.

A

Order of decision making

101
Q

o Plan for the future.
o It takes 1 year to add capacity
o What might my forecast be for next year?
o And the year after that?
o Invest in capacity to support those anticipated sales volumes.

A

Capacity decisions

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