Business 101 1st Edition Midterm 1 Study Guide Lectures 1 8 Lecture 1 January 6 Basic Economic Principles What is the definition of economics What are the three different kinds of economic systems Who is known as the father of modern economics What terms did he introduce What are the requirements for a free market Economics Definition The study of distributing resources for the production of goods and services within a social system Three different types of economic systems 1 Command socialism communism The government controls what goods services are produced their quantities and prices 2 Free Market What goods services are produced their quantities and prices are based on supply and demand The government has no role 3 Mixed Almost all actual economies the government has some role Ex Obamacare changed the free market of insurance but the US government doesn t control all markets in the US Adam Smith wrote An Inquiry into the Nature and Causes of the Wealth of Nations which promoted the idea of free and unrestricted trade He also wrote a book about morals that happened to support his principles of a free market Terms introduced by Adam Smith Invisible Hand term first used by Adam Smith it is an economic principle holding that the greatest benefit to a society is brought about by individuals acting freely in a competitive marketplace in pursuit of their own self interest If each consumer is allowed to choose freely what to buy and each producer is allowed to choose freely what to sell and how to produce it the market will settle on a product distribution and prices are beneficial to all the individual members of the community Individual self interest Promotes competition innovation in product and process greater value the worth importance or usefulness of something to somebody Benefits all members of the community not just each individual by creating more products more choices new products additional wealth and lower prices Free Market Requirements Private property Freedom of choice Fair competition Right to keep profits Lecture 2 January 8 What is a market What characterizes markets A group of people who have similar needs similar buying characteristics and the ability to purchase Markets are complex specialized and uncertain How do transitions in a marketplace affect the sellers suppliers Because consumers will only make a transaction when they believe that they will be better off in terms of wealth pressure is put on the suppliers for improvements in price product and performance What functions do managers preform for a company What are the different types of planning What are the five main branches of most companies Managers preform 4 main functions Planning Leadership Leading directing operating Controlling 1 Planning the process of defining planning includes Assessing future conditions and circumstances Setting goals based on that assessment Making decisions about work to be done by whom when and resource requirements Planning from top to bottom Planning horizon Responsibility 3 5 years strategic senior managers 1 3 years tactical middle managers 6 months 1year operational 1 st line managers Strategic plans define market products necessary to realize the company s objectives Includes purpose statement which is a short sound bite about the purpose or vision of a company and strategic objectives which are higher level statements of how the vision purpose will be realized Tactical Plans Specify how a company will use resources budgets and people to accomplish goals related to its strategic objectives Includes goals which state what specifically will be done and when Operational Plans Day to day plans for producing and delivering products and services Includes actions who what when and how the goals will be accomplished 2 Organizing A process activities that transform inputs into outputs that customers value Organizational structure the vertical and horizontal configurations of departments authority and jobs within a company 3 Leading Directing Includes communicating a vision inspiring and motivating point out proscribe a course of action More difficult than it sounds all told 4 Controlling Includes regulating work setting standards monitoring performance and taking corrective action when needed Business Functions Primary Research and development R D Marketing sales Production Finance Accounting Lecture 3 January 13 What is marketing What do customers want from you Marketing is an organizational function and a set of processes for creating communicating and delivering value to customers and managing customer relationships in ways that benefit stakeholders Marketing provides the 4 Ps for consumers which are products price place and promotion What is a marketing mix A unique blend of product place promotion and pricing strategies designed to produce mutually satisfying exchanges with a target market What is the difference between primary and secondary research Primary Data Research data collected for the first time for the purpose of solving the problem at hand Includes observational research and the collection of original information It relies on 3 types of information People watching people People watching an activity Machines watching people or activity Commonly collection sites includes checkout counters and coupons Secondary Research is the collection of information from published sources Relies on information from Websites Publications Research report What are some ways of segmenting markets What is a target market Basis for segmentation of consumers include geography demographics psychographics benefits sought and usage rate Target Market A group of people or organizations for which an organization designs implements and maintains a marketing mix intended to meet the needs of the group resulting in mutually satisfying exchanges Lecture 4 January 15 What is a Customer Survey Score How to calculate a CSS in foundation Customer Survey Score components in foundation Product positioning performance and size MTBF mean time before failure Price Age years since initial introduction Awareness how aware your customers are about your product Accessibility how easily your customers are able to find purchase your product Accounts receivable policy your customer s ability to purchase your product on credit Fast Track pages 5 6 Customer buying criteria Expectations Low tech importance Price 15 30 41 Age Ideal age 3 years 29 Reliability MTBF 14 000 20 000 21 Positioning Pfmn 5 3 size 14 7