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

Optimizing Customer Relationships

Customer and Firm Advantages

Customer Benefits

• Confidence
• Social Connection
• Special Treatment

Firm Benefits

• Economic Gains
• Improved Customer Behavior
• Enhanced Human Resource Management

Navigating Relationship Challenges

• The customer is not always right
• Targeting the wrong segment
• Customers not profitable in the long term
• Managing difficult customers

Effective Defection Management

A systematic approach to retain customers before they defect. This contrasts the concept of zero defects (Total Quality Management) with zero defectors.

Defection Management Process

1. Develop a zero-defections culture.
2. Communicate this goal to employees.
3. Train employees in defection management techniques.
4. Tie incentives to defection rates.
5. Develop switching

Of all the major inventions of the twentieth century, few have had a more profound impact on people’s lives than radio and television. By 1933, two-thirds of American homes had at least one radio, twice as many as those with telephones. Forty-five years later, 97 percent of all households had at least one television set. But the numbers cannot convey the contradictory roles that broadcasting has played in American society as it has reshaped the country’s politics, economy, and culture.

Role in American Society

The broadcast media have allowed Americans to listen to and watch candidates for public office in order to decide for themselves who merits their support. But television has also trivialized politics, overemphasizing appearance and... Continue reading "The Impact of Radio and Television on American Society" »

Public Relations Fields

• Internal Relations: This is the specialized part of public relations that builds and maintains mutually beneficial relationships between managers and the employees on whom an organization's success depends.
• Lobbying: This is a specialized part of public relations that builds and maintains relations with the government, primarily to influence legislation and regulation.
• Issues Management: This is the proactive process of anticipating, identifying, evaluating, and responding to public policy issues that affect an organization's relationship with its publics.
• Media Relations: This involves dealing and communicating with the news media when seeking publicity or responding to reporters' questions.
• Community Relations: A public

Advantages of Free Trade

International Specialization

Free trade promotes international specialization, allowing countries to focus on producing goods they have a comparative advantage in. This leads to a wider variety of products and increased total production.

Increase in World Production and Consumption

Free trade enables industries to benefit from economies of scale, leading to increased world production and consumption of internationally traded goods at lower costs.

Safeguard against Monopolies

Free trade fosters competition and helps prevent domestic monopolies by opening markets to international players.

Links with Other Countries

International trade promotes the exchange of knowledge, ideas, and culture, fostering better understanding and reducing... Continue reading "Advantages and Disadvantages of Free Trade: A Comprehensive Guide" »

Bretton Woods System: Fixed Exchange Rates and the IMF

The Bretton Woods system featured fixed exchange rates, although adjustments to parities were possible under extraordinary circumstances. Unlike the gold standard, only the U.S. dollar was legally bound to gold and convertible at a fixed value. This convertibility made the dollar highly desirable.

Other countries could acquire dollars in the international market and use them as a guarantee to issue their own currency. This system allowed for the potential to issue more currency with the same amount of gold reserves, benefiting from the U.S.'s unique position. This was advantageous under Keynesian policies.

However, the system was asymmetric, granting the U.S. significant power due to its ability... Continue reading "Bretton Woods System: Fixed Exchange Rates and IMF Role" »

The Spanish Financial Crisis

Ley del Suelo

The Spanish financial crisis began as an extension of the international financial crisis of 2008, but internal imbalances accumulated in the pre-crisis period aggravated the situation.

Causes of the Crisis

The main cause of Spain's crisis was the housing bubble and the accompanying unsustainably high GDP growth rate. The ballooning tax revenues from the booming property investment and construction sectors kept the Spanish government's revenue in surplus, despite strong increases in expenditure, until 2007. The rapid economic growth encouraged a boom in property. In 2006, Spain started building 800,000 new homes – more than Germany, Italy, France, and the UK combined.

However, in 2008, Spain was badly... Continue reading "The Spanish Financial Crisis: Causes, Effects, and Austerity Measures" »

Compensation is considered a most important factor in workers' decisions to change companies.

1. Compensation Concepts and Components

Compensation is often the most direct motivational factor, encompassing:

1.1. Maslow's Hierarchy of Needs and Motivations (1943)

• Salary
• Social Benefits
• Status
• Recognition
• Promotion

1.2. McClelland's Theory of Three Employee Needs (1962)

• Achievement
• Affiliation
• Power

1.3. Herzberg's Dual-Factor Theory (1968)

• Hygiene Factors: (neutral or demotivating)
• Motivating Factors: (motivational)

1.4. Motivation Factors (Juan A. Pérez López, 1993)

• Salary
• Social Benefits
• Status
• Recognition
• Promotion
• Service

Other Compensation Elements:

• Vacation Days
• Company Expenses
• Health Coverage
• Company Pension Fund
• Company Car
• Flexible Timetable

2. Determining Factors

The World Trade Organization (WTO)

Introduction

The establishment of the World Trade Organization (WTO) in 1995, following the Uruguay Round of negotiations under the General Agreement on Tariffs and Trade (GATT), represents a pivotal moment in the history of international trade. GATT, the precursor to the WTO, was founded in 1948 by 23 countries. It liberalized trade and fostered an environment that paved the way for the WTO's evolution. The WTO's scope is significantly broader than that of GATT, encompassing areas such as textiles, agriculture, services, and intellectual property, which were previously excluded under GATT.

Guiding Principles of the WTO

The core guiding principles of the WTO are:

• Non-discrimination among members in granting favors

Key Concepts in Product Development

What is the Most Expensive Stage of New Product Development?

Product commercialization often turns out to be the most expensive and risky part of the new product development process due to the financial commitments to both production and marketing once the go-ahead is given.

Understanding Strategic Givens in Product Launch

Strategic givens are strategic decisions that may have already been made before the strategic launch planning begins.

Types of Strategic Platform Decisions

• Permanent: "We are in to stay."
• Permanent, but as a Bridge to Other Items (Platform Strategy): "We are in to stay if we meet our goals."
• Temporary: Given firms’ tendency to develop streams of products, more and more new products are actually

Understanding the Product

A Product is anything that can be offered to satisfy a need or want.

A Product Manager understands the product and defines its best strategy.

Defining Product Strategy involves assessing external and internal performance, competitive situation, and the product's position within the overall product portfolio.

Product Attractiveness Factors include price-value, features, quality, and service mix.

Product Levels

Products can be understood at five distinct levels:

• Core Benefit: The fundamental benefit or service the customer is truly buying.
• Basic Product: The actual product features, design, quality, and packaging.
• Expected Product: The set of attributes and conditions buyers normally expect when they purchase this product.
• Augmented