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

What is Marketing?

Marketing is fundamentally about identifying and profitably meeting human and social needs. It encompasses the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that hold value for customers, clients, partners, and society at large.

Defining Marketing & Management

Marketing management is both an art and a science. It involves choosing target markets and then attracting, retaining, and expanding customer relationships by creating, delivering, and communicating superior customer value.

Marketing vs. Selling: A Key Distinction

Managers sometimes mistakenly view marketing as solely “the art of selling products.” However, many are surprised to learn that selling is...

The Five Types of Customer Needs

We can distinguish five types of needs:

• Stated needs: The customer wants an inexpensive car. Example: "I want to buy a cheap car."
• Real needs: The customer wants a car whose operating cost, not initial price, is low. Example: "I want a car that does not consume a lot of fuel."
• Unstated needs: The customer expects good service from the dealer. Example: The customer has not thought about the specific need they have.
• Delight needs: The customer would like the dealer to include an onboard GPS navigation system. Example: Identifying secondary needs that surprise the customer.
• Secret needs: The customer wants friends to see them as a savvy consumer. Example: Needs that the customer is unlikely to voice explicitly.

Target

**PART B**

1. Understanding Price Elasticity of Demand

Price elasticity of demand measures the responsiveness of demand to changes in price. It indicates how much demand will change in response to a given price change.

Elasticity of Smartco's Fruit Products

Smartco operates in a competitive industry where price elasticity is high. This means that even small changes in price can significantly impact demand for their fruit products.

Predicting Smartco's Market Activities

The high price elasticity of Smartco's products influences their market activities in several ways:

• Pricing: Smartco must maintain competitive prices to attract and retain customers.
• Promotions: Promotions can reduce price elasticity by increasing product awareness and loyalty.

**PART

The Nature of Corporate Entrepreneurship

Why Do We Need Corporate Entrepreneurship?

Businesses are currently faced with:

• Changing dynamic markets
• Globalization
• Shorter product life cycles
• High rates of technological change
• Pressures to reduce costs
• Changes in business organization

A Possible Response

Some large firms have responded to the changing environment by addressing their necessary response to working with a dynamic landscape, involving attitudes toward:

1. Risk
2. Innovation
3. Flexible, rapid response
4. Organizational and managerial changes

Corporate Entrepreneurship (Intrapreneurship)

Corporate Entrepreneurship (i.e., Intrapreneurship) is defined as the “process by which teams within an established company conceive, foster, launch and manage a new business...

Types of Mandatory Law

Absolutely Mandatory Law: These legal rules do not allow any alteration, whether favorable or not to the worker. Examples include:

• Probationary period of one year for indefinite-term employment contracts in support of entrepreneurs
• Guarantees of salary
• Prohibition of employment of persons under sixteen years of age

Minimum Relative Mandatory Law: These legal rules impose the minimum conditions of employment favorable to workers. These legal rules do not permit worse working conditions. Examples include:

• The number of days of annual holidays (30 calendar days a year)
• The minimum interprofessional wage (2006-655,20€)

Maximum Relative Mandatory Law: These legal rules do not allow the setting of better working conditions (they...

International Monetary Fund (IMF)

The IMF is an organization created to control the fixed exchange rate established in Bretton Woods.

The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund's mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global...

Advantages of International Trade

• Comparative Advantage: Specializing in goods with a lower opportunity cost increases economic welfare for all nations. Free trade allows countries to focus on their comparative advantage.
• Increased Exports: Beyond consumer benefits, firms exporting goods gain significant economic welfare. Lower tariffs on exports boost job creation and economic growth.
• Economies of Scale: Specialization allows industries with high fixed costs to benefit from economies of scale, leading to lower average costs, reduced consumer prices, and greater firm efficiency.
• Increased Competition: International trade forces domestic firms to compete with foreign entities, incentivizing cost-cutting and efficiency while preventing domestic monopolies

Development Charges

Development charges are fees imposed by local governments to offset the costs associated with new construction projects and their impact on public services. These charges help fund off-site improvements and cover expenses related to building inspections.

Property Tax Benefits

Property taxes offer several advantages as a source of revenue for local governments:

• Stable Source of Revenue: Property taxes provide a consistent and predictable income stream.
• Exportable Reach: Non-resident property owners who benefit from local services also contribute to the tax base.
• Equitable Financing: Property taxes support property-related services like police, fire protection, and infrastructure development (streets, sidewalks, storm drainage).

Major Issues in Joint Ventures

1. Joint venture name and its legal nature (limited liability company or not)
2. Scope and scale of production or operations
3. Investment amount, unit of currency, and equity (ownership) distribution
4. Forms of contribution (cash, technology, land, or equipment)
5. Responsibilities of each party
6. Technology or knowledge transfer
7. Marketing issues, such as focusing on export market or local market
8. Composition of the board of directors (in EJVs)
9. Nomination and responsibilities of high-level managers
10. Joint venture project preparation and construction issues
11. Labor management (various human resource issues)
12. Accounting, finance, and tax issues (the currency unit of accounting)
13. Alliance duration
14. Disposal of assets after expiration
15. Amendments, alterations,