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

Pricing Strategies: Supply and Competition Factors

Pricing Strategies Based on Supply

Cost-Based Pricing and Production Orientation

• Focuses only on company costs and desired profit margin.
• Associated risks: Production orientation and marketing myopia.

Product Mix Pricing Strategies

Setting prices across an entire product line or related products:

• Product Line Pricing: Setting prices across an entire product line.
• Optional Product Pricing: Pricing optional or accessory products sold with the main product.
• Captive Product Pricing: Pricing products that must be used with the main product (e.g., printer ink or razor blades).
• By-Product Pricing: Pricing low-value by-products to efficiently dispose of them.
• Product Bundle Pricing: Pricing bundles of products

iMarketing: Creating Value and Building Relationships

iMarketing is a process by which companies create value to satisfy customer needs through strong and long-lasting relationships with them, and capture value from them in return, ensuring enough profit. Strategic marketing is about the analysis and search for opportunities in the market, taking as a starting point the mission and the competitive advantage. Operational marketing is about the specific action plan that is designed and implemented to achieve strategic objectives or goals with proper management of allocated resources and within a defined framework.

Evolution of Marketing

• Production concept (1920): Demand exceeds supply, attractive prices and availability, focus on efficiency, passive

Understanding Brand Equity: Core Advantages

Strong brand equity offers numerous benefits to businesses, contributing significantly to long-term success and market resilience:

• Greater customer loyalty
• Less vulnerability to competitive marketing actions
• Reduced vulnerability to marketing crises
• Larger profit margins
• More inelastic consumer response to price increases
• More elastic consumer response to price decreases
• Greater trade cooperation and support
• Increased marketing communication effectiveness
• Possible licensing opportunities
• Additional brand extension opportunities

Enhancing Marketing Communication Effectiveness

Effective marketing communication assumes consumers progress through a series of stages or mental states based on the communication received:... Continue reading "Unlocking Brand Equity: Core Advantages and Strategic Growth" »

Strategic Management Midterm Exam Study Guide (Chapters 1-6)

1. Competitive advantage
2. Innovation
3. Sustainability
4. Emphasis of strategic management - Long term
5. Strategic management within a small organization - informal and irregular
6. Response(s) to performance gap - objective, strategy, policies
7. Corporate mission - description of competitive advantage
8. Basic elements of the strategic management process - environmental scanning, evaluation, and disseminating information to external and internal
9. SWOT
10. Types of Board of Directors members - phantom, rubber stamp, minimal, nominal, active, catalyst
11. Lead director - (Catalyst) Assign by the CEO and makes decision of operation of the company
12. Sarbanes-Oxley Act - Protect shareholder, whistle blowers, financial statement
13. When

Industrialization Strategies

Integral Industrialization

Followed in core countries, where all industries are industrialized. The pattern is to re-diversify the industry. The economy is articulated with a domestic market. Specialization is low, meaning it is very diversified.

Import Substitution Industrialization

Applied in the periphery, this involves industrialization to substitute imports. Countries industrialize to replace products they used to import. Income from basic products is used to develop industry.

Export Substitution Industrialization

Aims to replace the export basket. Focuses on exporting high-tech products to increase profits. These countries manage to acquire some technology transfers developed by multinationals.

Trade Policy Debates

Liberalism

Professional Personality Traits

Understanding key adjectives used to describe professional characteristics is essential for effective business communication.

Defining Key Personality Adjectives

Sociable

Likes to spend time with other people.

Ambitious

Wants to reach the top in their career.

Creative

Has a lot of new ideas.

Reliable

Does what they promise to do.

Relaxed

Is usually calm.

Hard-working

Spends a lot of time doing a good job.

Punctual

Likes to be on time.

Motivating

Encourages other people to work well.

Helpful

Is good at making things work.

Practical

Likes to do things for other people.

Applying Personality Traits: Maria's Profile

Maria is good in a team and she gets on well with her colleagues. She is extremely sociable. She is never late for meetings—she... Continue reading "Key Business Adjectives: Describing People and Markets" »

Partnerships and Limited Companies

Partnership: A business carried on in common with a view to profit.

Advantages:

• Shared responsibility
• Economies of scale
• Private accounts
• Spread profit for tax purposes

Disadvantages:

• Shared profit
• Joint and several liability
• Disagreements
• All profits taxed

Limited Company: Owned by shareholders, run by directors. It can be a public or private company and is a separate legal entity that pays corporation tax.

Advantages:

• Limited liability
• Perpetual succession
• Corporation tax

Disadvantages:

• Running costs
• Personal guarantees may be required
• Filing deadlines
• Private transactions
• Owner vs. manager conflict (payout or reinvest)
• Privacy (public accounts)

Inheritance Tax - Agricultural Property Relief

Must be occupied for 2 years. Relief... Continue reading "Partnerships, Limited Companies, and UK Tax Reliefs" »

Distribution Strategies

Intensive Distribution

Producers of convenience products and common raw materials typically seek intensive distribution—a strategy in which they stock their products in as many outlets as possible. These goods must be available where and when consumers want them. For example, toothpaste, candy, and other similar items are sold in millions of outlets to provide maximum brand exposure and consumer convenience. Procter & Gamble, Coca-Cola, and other consumer goods companies distribute their products in this way.

Exclusive Distribution

By contrast, some producers purposely limit the number of intermediaries handling their products. The extreme form of this practice is exclusive distribution, in which the producer gives... Continue reading "Distribution Strategies: Intensive, Exclusive, and Selective" »

Market Type Comparisons

• Niche market is the smallest type of market. (Small)
• Luxury market is more expensive than other markets. (Expensive)
• Mass market is the most popular type of market. (Popular)
• Mass market is larger than niche market. (Large)
• Luxury market is the most expensive type of market. (Expensive)
• Home market is smaller than export market. (Small)
• Home market is the most boring market in Chile. (Boring)
• Technology market is the most modern market nowadays. (Modern)

Brand and Product Comparisons

• Dominos makes the best hot dogs in Chile. (Good)
• Apple is more interesting than Samsung. (Interesting)
• Volvo is the safest car. (Safe)
• Rolex is fancier than Casio. (Fancy)
• Mc Cola is worse than Coke. (Bad)
• Microsoft has the most stable computer. (Stable)

Factors Affecting Consumer Spending

A nation’s consumer spending is affected by:

1. Current Disposable Income: Measured using the Average Propensity to Consume (APC) and Average Propensity to Save (APS).
2. Permanent Income: Based on the life-cycle model, measured using the Marginal Propensity to Consume (MPC) and Marginal Propensity to Save (MPS).
3. Wealth: Calculated as assets minus liabilities (e.g., home equity minus mortgage) of a country, representing the sum total of individual residents’ wealth.

Components and Influences on Investment

Investment is composed of:

• Purchase of buildings.
• Equipment (machinery and production tools).
• Additions to stock (or inventory) of inputs and output.

Investment decisions are affected by:

1. Revenues: Firms invest if they