Notes, summaries, assignments, exams, and problems for Economics

Customer Relationships Are Key to Your Marketing Strategy

If I could show you how to increase your sales by 50% without increasing your marketing budget, would you be interested?

There are many reasons a customer or client may leave you, but the ones you will hear most often are:

• They felt your pricing was too high or unfair.
• They had an unresolved complaint.
• They took a competitor's offer.
• They left because they felt you didn't care.

When faced with the above facts, why is it businesses spend 80% of their marketing dollars going after new customers?

Before you spend your time and money going after new customers and clients you do not currently have a relationship with, consider the following statistics:

• Repeat customers spend 33% more than new customers.

Key Accounting Terms

• Entries: Journal analysis of the effects of a transaction on the accounts, usually accompanied by an explanation of the transaction.
• Ledger: Single accounts kept updated by posting. Each is recorded with one debit and one credit.
• Assets: Resources controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.
• Liabilities: Obligations of the enterprise arising from past events, expected to result in an outflow from the enterprise of resources embodying economic benefits.
• Equity: What is left of the assets after liabilities are deducted. Capital or owner's interest, withdrawals.
• Expenses: Amounts that have been paid or will be paid for costs that have been incurred

Chapter 3: Business Organizations

There are five main forms of business organizations in the private sector:

1. Sole Traders
2. Partnerships
3. Private Limited Companies (PLCs)
4. Public Limited Companies (Ltd.)
5. Co-operatives

Key Business Terms

Limited Liability: This term refers to the owners of a company (shareholders). They are not held responsible for the debts of the company they own. Their liability is limited to the investment they made in buying the shares.

Partnership Agreement: A written and legal agreement between business partners. While not essential, it is always recommended.

Sole Traders: The most common form of business organization. It is a business owned and operated by one person.

Partnerships: A group or association between 2 and 20 people who...

The structure organizing the work within a company directly impacts the perception that a worker can have of their working conditions and professional achievements. A highly vertical organizational structure with a long chain of command and control sections does not work well in the short term for teams. In contrast, horizontal structures best facilitate teamwork. The organizational structure influences the number of rules, procedures, paperwork, and other limitations that are encountered by workers in developing their work. There are six key elements considered in the organizational structure of an enterprise:

• Work specialization
• Bureaucracy
• Departmentalization
• Chain of command
• Centralization and decentralization
• Formalization

Entrepreneur Motivation

It...

Sales Organization

Our company, operating in the tertiary sector, is dedicated to providing services directly to the customer. Therefore, we utilize a direct distribution channel: Manufacturer to Final Consumer.

Pricing Policy

Our company aims to achieve the following objectives:

• Establish a permanent presence.
• Generate market returns in the short term.
• Promote and position our products and services, and defend against competition.

Pricing: The price of our products and services is set by studying the following three methods, so we consider:

• The costs (COST & SELLING PRICE RANGE)
• The maximum price that can be set on the market, analyzing the advantages and disadvantages of the company against the competition.

Legal Form

The legal form is a Limited...

Just-in-Time (JIT) and Quick Response (QR)

Just-in-Time (JIT), meaning "at the right time", ensures that raw materials and finished products are available to the production process or the end user precisely in the class, quantity, and time required. The Quick Response (QR) technique is a management system that uses information technology for real-time information about market demand and responds instantly, reducing production costs and maintaining stocks.

Distribution Channel Selection

Choosing the best option among possible distribution alternatives is crucial. Decisions include single or multi-channel, direct or indirect. The most frequent activities in a company are:

• Development of the company's distribution plan.
• Determining the geographic scope

Internal vs. Foreign Markets

Develop internal markets within a country's natural geographic barriers. While foreign markets undergo internationalization (all productive or commercial activities in a context of globalization), the company performs outside its natural geographic markets. There are different degrees of internationalization:

• Exporting
• Direct investment (sales subsidiaries and production subsidiaries)
• Contractual arrangements for international cooperation (licensing, franchising, joint ventures, export consortia)

The Multinational Company

A multinational company is one that is not only established in its country of origin but also in other countries to conduct its business activities, including sales, purchasing, and production.

Benefits

Conditions of Supply

• Product/Service Price, Quality, and Delivery Times

• Policy Provider Stocks

  (Including customer deposits)

• Minimum Orders for Products and/or Delivery

  (Effect of transport)

• Type and Mode of Transport

  (Who manages?)

• Contact and Delivery Addresses

• Inter-Agency Partners

  (Including transportation, logistics operators, etc.)

• Date and Schedules

  Discharge Planning

  (Time windows)

• Packaging and Palletization

• Coding, Identification, and Related Documents

• Batch Management and Disqualifications

  (Traceability)

• Special Conditions of Product Conservation

• Rejection Criteria

  (Defined tolerances on price, quality, deadlines, quantities, references, etc.)

• Incident Procedure, Returns Due to Rejections

  (What to do with the product, who collects, what penalties

Need for Company Capital

The need for a company's capital relates to the role of company resources and all activities designed to obtain the necessary funds and allocate them for the most rational use. This allocation aims to yield a higher return with less risk and cost.

Sources of Funding

Sources of Funding: By Origin

According to their origin, funding sources can be classified as:

• Internal Resources: Generated by the company itself, constituting reserve funds and depreciation.
• External Resources: Obtained from outside the firm, including contributions from partners, capital increases, loans issued by the company, and various forms of debt through loans and credits.

Sources of Funding: By Ownership

According to the title or ownership, resources can...