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

Job Production

This type of production makes a single, unique product from start to finish.

Advantages

• Unique, high-quality products are made.
• Workers are often more motivated and take pride in their work.

Disadvantages

• Very labor-intensive, so selling prices are usually higher.
• Production can take a long time and be expensive, for instance, if special materials or tools are required.
• Economies of scale are not possible, often resulting in a more expensive product.

Batch Production

In this type of production, products are made in batches. For example, a shoe factory could make different batches of shoes based on their size and color.

Advantages

• Since larger numbers are made, unit costs are lower.
• Offers customers variety and choice.
• Materials can be bought

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... Continue reading "Understanding Marketing: Core Concepts & Applications" »

Value and Satisfaction

The buyer chooses the offerings he or she perceives to deliver the most value, the sum of the tangible and intangible benefits and costs to her. Value is a combination of quality, service, and price (qsp), called the customer value triad. Value perceptions increase with quality and service but decrease with price. (real value - what an enterprise is offering).

Marketing is the identification, creation, communication, delivery, and monitoring in relationship to expectations. If the performance falls short of expectations, the customer is disappointed. If it matches expectations, the customer is satisfied. If it exceeds them, the customer is delighted.

Marketing Channels

To reach a target market, the marketer uses three kinds... Continue reading "Marketing: Value, Channels, and Environment" »

COMPANY ORIENTATION TOWARD THE MARKETPLACE

The production concept is one of the oldest concepts in business. It holds that consumers prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution. Marketers also use the production concept when they want to expand the market.

The product concept proposes that consumers favor products offering the most quality, performance, or innovative features. A new or improved product will not necessarily be successful unless it’s priced, distributed, advertised, and sold properly.

The selling concept is based on hard selling is risky. It assumes customers coaxed into buying a product... Continue reading "Understanding Marketing Concepts and Holistic Marketing Dimensions" »

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... Continue reading "Spanish Labor Law: Contract Types, Trial Periods, and Extra Pays" »

Core Concepts: Managing Market Demand

Needs, Wants, and Demands

People have needs for specific goods or services. Companies aim to identify and satisfy these needs. A complete demand includes four components:

• The underlying need and the specific want.
• The budget (ability to pay).
• The specific plan to purchase the item.

Types of Consumer Needs

Understanding the different levels of needs is crucial for effective marketing:

• Stated Needs: Explicit requests. Example: “I want to buy a cheap car.”
• Real Needs: The underlying requirement. Example: “I want a car that does not consume a lot of fuel.”
• Unstated Needs: Needs the customer has not yet consciously considered.
• Delight Needs: Identifying secondary needs that exceed basic expectations.
• Secret Needs:

Defining Competitive Territory and Boundaries in Mission Statements

• **Industry:** Companies may operate in one or multiple industries, including industrial goods, consumer goods, or services.
• **Products and Applications:** Firms define the range of products and applications they will offer.
• **Competence:** Companies identify their core competencies and leverage them.
• **Market Segment:** The type of market or customers a company targets.
• **Vertical:** The number of channel levels in which a company participates, from raw materials to distribution.
• **Geographical:** The regions, countries, or country groups in which a company operates.

Establishing Strategic Business Units (SBUs)

Companies can define themselves in terms of products or customer-satisfying... Continue reading "Defining Business Scope and Strategic Units" »

Understanding Business Costs

In business, understanding different types of costs is crucial for effective financial management. Costs can be categorized based on how they behave in relation to production levels or how directly they can be attributed to a product or service.

Key Cost Classifications Defined

• Variable costs change in proportion to the amount of output produced.

• Fixed costs remain the same, no matter how much the business produces.

• Semi-fixed costs are costs which only change when there is a large change in output. For example, costs associated with buying a new machine to cope with increased production.

• Direct costs are costs which can be identified directly with the production of a good or service; e.g., raw materials.

• Indirect costs

The Nature of Corporate Entrepreneurship

Why do we need Corporate Entrepreneurship?

Businesses are 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 responded to the changing environment by addressing their necessary response to working with a dynamic environment involving attitudes to:

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 that is distinct... Continue reading "Corporate Entrepreneurship: Benefits, Strategies, and Environment" »

Integrated Marketing

Integrated marketing involves creating and executing marketing activities and programs that work together to deliver value to consumers. This includes ensuring consistency across communications, products and services, and channels.

An effective integrated marketing strategy requires choosing communication options that complement each other and developing a cohesive channel strategy.

Internal Marketing

Internal marketing focuses on hiring, training, and motivating employees to provide excellent customer service. It emphasizes the importance of a company-wide understanding and support for marketing efforts.

To achieve success, internal marketing requires vertical alignment with senior management and horizontal alignment with other... Continue reading "Understanding Marketing Concepts and Strategies" »