Business Economics Flashcards

Question

mission

Answer 1

A short phrase or sentence which describes the organization's basic function in society, for its costumers.

Answer 2

* S: patents strong brand names good reputation among customers exclusive access to high grade natural resources favorable access to distribution networks * W: lack of patent protection a weak brand name poor reputation among customers high cost structure lack of access to the best natural resources lack of access to key distribution channels * O: an unfulfilled customer need arrival of new technologies loosening of regulations removal of international trade barriers * T: shifts in consumer tastes away from the firm's products emergence of substitute products new regulations increased trade barriers

Answer 3

* Growth stage: Product quality is maintained and additional features and support services may be added. Costs are reduced due to economies of scale Sales volume increases significantly Pricing is maintained as the firm enjoys increasing demand with little competition Profitability begins to rise Public awareness increases Competition begins to increase with a few new players * Mature stage : Costs are lowered as a result of increased production volumes and experience curve effects Sales volume peaks and market saturation is reached, the strong growth in sales diminishes Increase numbers of competitors entering the market Prices tend to drop due to the proliferation of competing products Brand differentiation and feature diversification is emphasized to maintain or increase market share * Saturation and decline stage: Sales volume declines or stabilizes Prices and profitability diminish Profit becomes more a challenge of production/distribution efficiency than increased sales

Answer 4

* The ratio of the percent change in one variable to the percent change in another variable. * Useful to understand the dynamic response of supply and demand in a market, in order to achieve an intended result or avoid unintended results.

Answer 5

1) Marketing Research: 2) Develop research process 3) Data source (secondary or primary) 4) Data Collection: Qualitative research is an in-depth exploration of what people think, feel or do and, crucially, why. If you want to know why your customers behave as they do and what barriers there may be to their changing that behaviour, you would use qualitative research to explore those issues. Qualitative research does not give statistically robust findings. Quantitative research provides a measure of how many people think, feel or behave in a certain way and uses statistical analysis to determine the results. If you want to know how many of your customers support a change in a product or service - and how strongly they support it — so that you can determine whether you have a business case for making that change, you would use quantitative research. 5) Analysis data 6) Formulating the conclusions and preparing the report

Answer 6

Segmentation: * Demographics. For example age, gender, income bracket, education, job and cultural background. * Psychographics which refers to the customer group's lifestyle. For example, their social class, lifestyle, personality, opinions, and attitudes. * Behaviour which is based on customer behaviour. For example, online shoppers, shopping centre customers, brand preference and prior purchases. * Geographical location (continent, country, state, province, city etc) Targeting: * Undifferentiated Targeting: This approach views the market as one group with no individual segments, therefore using a single marketing strategy. ( for a business or product with little competition where you may not need to tailor strategies for different preferences.) * Concentrated Targeting: This approach focuses on selecting a particular market niche on which marketing efforts are targeted. Your firm is focusing on a single segment so you can concentrate on understanding the needs and wants of that particular market intimately. Small firms often benefit from this strategy as focusing on one segment enables them to compete effectively against larger firms. * Multi-Segment Targeting: This approach is used if you need to focus on two or more well defined market segments and want to develop different strategies for them. Multi segment targeting offers many benefits but can be costly as it involves greater input from management, increased market research and increased promotional strategies.

Answer 7

* Premium pricing strategy establishes a price higher than the competitors. It's a strategy that can be effectively used when there is something unique about the product or when the product is first to market and the business has a distinct competitive advantage. * A penetration pricing strategy is designed to capture market share by entering the market with a low price relative to the competition to attract buyers. The idea is that the business will be able to raise awareness and get people to try the product. * Economy pricing is a familiar pricing strategy for organizations that include Wal-Mart, whose brand is based on this strategy. Aldi, a food store, is another example of economy pricing strategy. Companies take a very basic, low-cost approach to marketing--nothing fancy, just the bare minimum to keep prices low and attract a specific segment of the market that is very price sensitive. * Price skimming. Businesses that have a significant competitive advantage can enter the market with a price skimming strategy designed to gain maximum revenue advantage before other competitors begin offering similar products or product alternatives. * Psychological pricing strategy is commonly used by marketers in the prices they establish for their products. For instance, $99 is psychologically "less" in the minds of consumers than $100. It's a minor distinction that can make a big difference.

Answer 8

GDP – Gross Domestic Product- is the sum of the value added generated within the countries borders by producing goods and services. GNP – Gross National Product – is the sum of the value added generated by national factors of production anywhere in the word. * not include: Black market , drugs, prostitution. mafia , illegal trade

Answer 9

I. Personal consumption a) Durables (washing machines, refrigerators, automobiles, and toaster ovens.) b) Nondurables (a shorter life span - food) c) Services II. Investment a) Nonresidential b) Structures c) Producers' durables d) Residential III. Exports & Imports a) Goods b) Services IV. Government expenditures a) Federal b) State and local

Answer 10

* Frictional unemployment, also called search unemployment, occurs when workers lose their current job and are in the process of finding another one. There may be little that can be done to reduce this type of unemployment, other than provide better information to reduce the search time. This suggests that full employment is impossible at any one time because some workers will always be in the process of changing jobs. * Structural unemployment occurs when certain industries decline because of long term changes in market conditions. For example, over the last 20 years UK motor vehicle production has declined while car production in the Far East has increased, creating structurally unemployed car workers. Globalisation is an increasingly significant cause of structural unemployment in many countries. * Classical unemployment is caused when wages are ‘too’ high. This explanation of unemployment dominated economic theory before the 1930s, when workers themselves were blamed for not accepting lower wages, or for asking for too high wages. Classical unemployment is also called real wage unemployment. * Seasonal unemployment exists because certain industries only produce or distribute their products at certain times of the year. Industries where seasonal unemployment is common include farming, tourism, and construction.