Chapter 16&18 Flashcards
IMC
Integrated marketing communication
A technique that combines all the promotional tools into one comprehensive unified promotional strategy
Trade advertising
Advertising to wholesalers and retailers by manufacturers to encourage them go carry their products
Promotion mix
Combination of promotional tools an organization uses
- advertising
- personal selling
- public relations
- sales promotion
- product (if given free)
Institutional advertising
Advertising designed to create an attractive image for an organization rather than product
Advocacy advertising
Advertising that supports a particular view of an issue
Viral marketing
Paying customers to day positive things on the internet to settling multilevel selling schemes whereby customers get commission for directing friend’s specific websites
Pull strategy
Promotional strategy which heavy advertising and sales promotion efforts are directed to the costumers, so they will request the products from retailers. If the pull strategy works, customers will go to the store and ask for the products
Push stragety
Promotional strategy in which producer used advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise. If push strategy works, customers will walk into the stores, see the product, and buy it.
Pick economy
Customers who pick out their products from online outlets or who do online comparison shopping
Three most common reasons a firm fails financially
1 undercapitalization
2 poor control over cash flow
3 inadequate expense control
3 steps in finance planning
- Forecasting financial needs
- Developing budgets to meet those need
-capital budget: spending plans asset purchases, large sum of money
-cash budget: cash inflows and outflows
-operational (master) budget: ties together the firm’s other budgets and summarizes its proposed financial activities - Establish financial controls
Financial control: compares its actual revenues, costs and expenses with its budget
Capital expenditures
Major investment in both tangible longterm assets such as land, buildings, and requirements or intangible assets as patents, trademarks, and copyright
Equity financing
Money raised from within the firm, from operations or through the sale if ownership in the firm
Short-term financing (7)
- Trade credit, buy now pay later
Promissory note, a written contract with a promise to pay a supplier a specific sum of money at a definite time - Family and friends
- Commercial banks
- Different forms of short-term loan
- Factoring accounts receivable
Factoring: the process of selling accounts receivable for cash, this is expensive and its not a loan - Commercial paper: unsecured promissory notes of $100,000 and up that mature in 270 days or less
- Credit cards
Different forms of short-term loan
5
- Secured loan: backed by collateral (property)
- Unsecured loan: a loan that doesn’t require any collateral
- Line of credit: given amount of unsecured short-term funds a bank will lend
- Revolving credit agreement: line of credit that’s guaranteed but usually come with a fee
- Commercial finance companies: organizations that make short-term loans to borrowers who offer tangible assets as collateral
Obtaining long-term financing
- Debt financing
- Equity financing
- Comparing debt and equity financing
Debt financing
3
By borrow form lending institution:
- term-loan agreement: promissory note that requires the borrower to repay the loan in specified installment, advantage interest is tac deductible
- Risk/Return trade-off: principle that the greater the risk a lender takes in making a loan, the higher the interest rate requires
By issuing bonds:
- Indenture terms: term of agreement in bond
- Secured bond: bond issue with collateral
- unsecured: only back by reputation of issuer also called a debenture bond
Equity financing
- selling stock
- retained earning, reinvest profit in firm
- venture capital: money that is invested in new or emerging companies that are perceived as having a great profit potential
