Notes, abstracts, papers, exams and problems of Economy

Topic 1: The Marketing Function

What is Marketing?

Marketing is the process of identifying, understanding, and meeting customer and societal needs by creating, communicating, delivering, and exchanging value.

Key Concepts:

• Need: A basic requirement for survival (e.g., food, shelter).
• Want: A specific desire for a product or service that can satisfy a need.
• Demand: Wants backed by the ability and willingness to pay.
• Product: Any tradable offering that satisfies a need, including tangible goods, services, ideas, and experiences.
• Market: All potential buyers who share a need or desire and have the ability to exchange value.
• Consumer Insight: A non-obvious understanding about customers that can change their behavior for mutual benefit.

Evolution of Marketing

1. Product

Factors Affecting Supply

Costs in Supplying Goods to the Market

• Price of raw materials
• Wage rates

Improvements in Technology

Makes it cheaper to produce goods.

Taxes and Subsidies

Higher taxes mean higher costs.

Climate (for Agricultural Products)

Supply of crops depends on weather.

Impact of Supply on Market Price and Sales

If supply falls, the market price will rise, sales will fall, and the supply curve will shift to the left. If supply rises, the market price will fall, sales will rise, and the supply curve will shift to the right.

Elasticity of Supply

Elasticity of supply measures how easily and quickly supply can change when prices change. This depends on how quickly products can be produced and supplied, which is often slow for agricultural products.... Continue reading "Supply, Demand, and Pricing Strategies in Business" »

Market expansion strategies (concentration-specialization and spreading-flexibility)

Motivation for internationalizing: Proactive and Reactive:

• Reactive: market-competitive environment-political environment-economic environment-chance occurrence-extra inventory-exporting.
• Proactive: expanding sales-launch an offensive-power & prestige, lower costs of labor-less stringent rules-extend life of a product.

Rules of entry mode: Naive-Pragmatic – strategy.

Entry modes: Exporting-Contractual- Investment.

• Exporting: Types:
  • Direct (ad: control foreign markets-good info feedback-better protection of trademarks. Dis: higher start-up costs-high investment-info requirements)
  • Indirect (ad: fast market access-Little commitment-export management is outsourced.

Capacity Planning Considerations

Capacity can be stated in terms of inputs or outputs. Planning capacity too low results in unmet demand, while planning it too high results in higher costs.

Facility Considerations

Facility: Permanent, semi-permanent, or temporary commercial or industrial property such as a building, plant, or structure, built, established, or installed for the performance of one or more specific activities or functions. When deciding where to produce (Facility), important factors to consider:

• Proximity to market
• Availability of raw materials, transportation, power, and labor
• Climatic influences and community characteristics
• Taxes and inducements

Facility Layouts

1. Fixed-Position Layout

A layout that brings all resources required to... Continue reading "Optimizing Capacity, Facility Layouts, and Supply Chain Management" »

Marketing Strategy and the Marketing Mix

A strategic plan defines a company's overall mission and objectives. Consumers are at the center. The goal is to create value for customers and build profitable customer relationships. Next comes the marketing strategy, which is the logic by which the company creates customer value and profitable customer relationships. The company decides which customers it will serve and how.

Customer-Driven Marketing Strategy

Market Segmentation

The marketer must determine which segments offer the best opportunities. Consumers can be grouped in various ways based on geographic, demographic, psychographic, and behavioral factors. The process of dividing a market into distinct groups of buyers is called market segmentation.... Continue reading "Mastering Marketing Strategy: Segmentation, Targeting & Mix" »

Basis Property Acquired as Gift

If donor ABFMV, then dual basis applies (1 gain basis & 1 loss basis). Where GB=DonorAB & LB=FMV prop. If sellpr>DonorAB D1EAB=DonorAB @ date of gift. If sellpr,

Scott has decided to dispose of these assets that he received as a gift. Compute his realized & recognized g/l on these disposals: a. In 2000, he received stock with a FMV of 88k. The donor’s AB was 100k. He sells the stock for 72k this year. Gain basis=100k Loss basis=88k Amtreal=72k-Lossbasis88k=(12k) RecogL.

In 2001, he received land with FMV of 42k. The donor’s AB was 50k. He sells the land this year for 45k. Since sellpr b/w AB & FMV. No g/l permitted.

Nicky receives a car from Sam as a gift. Sam paid 48k for the car. He had... Continue reading "Tax Implications of Property Disposal and Exchange" »

Unique Selling Proposition (USP)

A Unique Selling Proposition (USP) is the attribute or characteristic that makes a business special and differentiates it from the competition in the minds of customers.

External Stakeholders

External stakeholders include:

• Local community – e.g., local farmers, herders, and villagers.
• Government – e.g., central and regional.

Target Profit Formula

The target profit formula is:

Target Profit Quantity = (Fixed Cost + Target Profit) / (Price - Variable cost per unit)

Example: (800,000 + 400,000) / (10,000 - 5,000) = 240 trekkers

Impact of Changes in 2014

In 2014, the following changes occurred:

• Annual fixed costs increased by 20%.
• Rising fuel costs of flights increased average variable costs by 40% per trekker.
• The average

Drivers of Globalization

1. Trade and Transactions

The rise of free trade agreements and the elimination of barriers like tariffs have fueled global trade. The mutual recognition market ensures the acceptance of goods across borders, leading to increased cross-border trade, manufactured goods, and multinational corporations.

2. Capital and Investments

Foreign investment has shifted significantly, with a decrease from 65% of the world's GDP in 1991 to 30% in 2006. There's a growing trend of investments in developing countries like those in Africa. For example, Santander generates 25% of its business in Brazil.

3. Migration

Global migration has seen a dramatic increase from 78 million people in 1975 to 2 billion in 2005. Migrant remittances play a... Continue reading "Globalization: Drivers, Impacts, and Paradoxes" »

-External Analysis: To detect Opportunities and Threats - Internal Analysis: To discover Strengths and weaknesses.

PEST Analysis

Strategic business tool used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact their business now and in the future. The framework examines opportunities and threats due to:

• Political
• Economic
• Social
• Technological forces

SWOT Analysis

Understanding TODAY TO BUILD A BETTER TOMORROW! It should be placed at the beginning of a project to begin the process of decision-making. SWOT analysis is the first stage in the planning process for a business venture or to measure almost anything that is influenced by internal and external factors.

• Strengths - Internal Factor +, favorable when