Business Fundamentals: Power, Costs, Segmentation, Promotion, and Accounting

What is Negative Business Power?

Negative business power is something an organization acquires by obtaining immense wealth, knowledge, and technology within a country. Such power can cause trouble for both the company and the country. Therefore, the government should take necessary steps to regulate business power, preventing it from emerging as negative business power.

Differences Between Direct and Indirect Expenses/Costs

1. Direct Expenses/Costs

The value of the components, parts, or materials used during the income period.

2. Indirect Expenses/Costs

Expenses that cover the indirect costs of production during the income period. Examples of indirect expenses include transport costs (petrol/repairs), marketing costs (advertising), and administration costs (bank fees, mobile, etc.).

Marketing Segmentation

Marketing segmentation is the grouping of customers according to differences in their needs and behavior.

Four Common Segmentation Criteria

The four types of criteria commonly used for segmentation are as follows:

1. Geographic Segmentation: This type of segmentation groups potential customers according to where they live, because different geographical locations vary in characteristics.
2. Demographic Segmentation: This type of segmentation groups potential customers according to factors such as age, gender, lifestyle, education, and the economy, on the basis that people's needs often vary with their demographic characteristics.
3. Psychographic Segmentation: This type of segmentation groups potential customers according to their beliefs, attitudes, and opinions, as well as their psychological characteristics.
4. Behavioral Segmentation: This type of segmentation groups people based on their behavior.

The Four Elements of the Promotional Mix

The promotional mix consists of:

1. Personal Selling
2. Sales Promotion
3. Public Relations
4. Advertising

The Three Main Accounting Statements

1. The Cash Flow Statement: This report shows the flow of cash into and out of an organization.
2. The Income Statement: This report shows the profitability of the business. It shows what income has been earned and what expenses were incurred in earning it. If the income is larger than the expenses, it becomes a profit. If the expenses are greater than the income, it becomes a loss.
3. The Balance Sheet: It shows the financial position at a point in time, including Assets, Liabilities, and Equity.