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

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

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" »

The Three Phases of Value Delivery

We can divide the value creation and delivery sequence into three distinct phases. This process begins before a product exists and continues through development and after launch. Each phase has significant cost implications.

1. Choosing the Value (Strategic Marketing): This represents the “homework” marketing must complete before any product exists. Marketers must segment the market, select the appropriate target, and develop the offering’s value positioning. The formula Segmentation, Targeting, Positioning (STP) is the essence of strategic marketing.
2. Providing the Value (Tactical Implementation): Marketing must determine specific product features, pricing strategies, and distribution channels.
3. Communicating

Spanish General Accounting Plan (PGC)

The Spanish General Accounting Plan (PGC) establishes the legal framework for technical accounting standardization. It aims to ensure that fundamental economic and financial information of companies is reliable and comparable.

Conceptual Framework

The conceptual framework is a set of fundamentals, principles, and basic concepts underlying the entire plan. It serves as an instrument that provides unity and consistency to the whole standard. Annual accounts must provide clear information.

Accounting Principles

• Going Concern: Financial statements are prepared assuming that the company will continue to operate in the foreseeable future.
• Accrual Basis: This involves the accounting records of business transactions

Profound Societal Shifts in the Late 19th and Early 20th Centuries

• What significant changes occurred in Europe and the USA during the late 19th and early 20th centuries?
  A: Profound changes occurred in social, political, and daily life, impacting the collective behavior surrounding production relations, work, and leisure. Significant population growth occurred as peasants migrated to cities, causing problems related to housing, education, and employment.
• What issues arose from the migration to cities?
  A: Problems related to housing, education, and labor.
• What role did the middle class play in the late 19th and early 20th centuries?
  A: The emergence of a mass market, driven by the middle class, caused significant changes in society (political,

Spain's Competitive Advantages for Startups

Talent, Tolerance, and Technology

Spain offers numerous public and private resources for new businesses. Key advantages include:

• The 3 T's: Talent, Tolerance, and Technology: Spain boasts innovative and advanced industries, fostering startup growth. Its open and tolerant culture welcomes diverse nationalities, creating a vibrant environment. Furthermore, Spain ranks among the top five global developers, demonstrating a rich talent pool.
• Public Support: Government programs actively attract foreign entrepreneurs. Initiatives like "Rising Startup Spain" offer incubation programs, workspaces, visa assistance, and financial support for initial expenses.
• Market Access: While Spain's market may be smaller,

SWOT Analysis Example: Direct Distribution

This example is based on an imaginary business-to-business manufacturing company that historically relied on distributors. The company is considering creating its own distribution company to directly reach end customers in sectors not currently covered by its distributors. This SWOT analysis examines that opportunity.

Subject of Analysis

Creation of a direct distribution company to access underserved end-customer segments.

Strengths

• Control and direction over final customer sales
• High product quality and reliability
• Superior product performance compared to competitors
• Excellent product lifetime and durability
• Idle manufacturing capacity
• Some employees have experience with end customers
• Existing customer list