Bikes Simulation

Question 1

Customer needs/customer value hierarchy

Answer 1

List of Customer’s wants from most -> least wanted; use to create best catering product

Prioritize benefits over features in brand design

Identify desired benefits and link to features in Market Opportunity Analysis

Research real-world usefulness and match features with sought-after benefits

Consider customer preferences and market prices for a logical brand design.

Question 2

Feature

Answer 2

an essential function or component of a good or service.

Question 3

Benefit

Answer 3

how a product’s features could make a consumer’s life easier or more enjoyable.

Question 4

Target market

Answer 4

The primary market is the target market selected as the main focus of marketing activities and most of the firm’s resources are allocated to the primary target.

The secondary target market is likely to be a segment that is not as large as the primary market, but may have growth potential.

Helps efficiently allocate resources, exploring expansion opportunities, and mitigating risk

Question 5

Demand curves

Answer 5

Relationship between the price of a good and the quantity demanded

Question 6

Demand forecasting

Answer 6

Using predictive analysis of historical data to estimate and predict customers’ future demand for a product or service

To determine your daily operating capacity, take the forecasted total demand for all brands from Sales and then divide it by n days

Question 7

Pricing

Answer 7

If your firm’s average price is below the competition, the price differential should help in generating more demand and taking business away from your competition.

Question 8

Price elasticity

Answer 8

How sensitive customers are to changes in price -> knowing it helps you understand how much you can cut/raise prices

Question 9

Price rebates

Answer 9

Short-term stimulant to market demand; create excitement

Don’t work with inelastic segments (gives off negative image)

Could be bad b/c removes income from future sales

Question 10

Fixed Capacity

Answer 10

Determines the maximum number of units your production facility can produce each day.

Operating capacity must be less than Fixed capacity

Question 11

Operating Capacity

Answer 11

Determines the number of workers to employ, and thus, the number of units that are produced each day.

Operating capacity must be less than Fixed capacity

Question 12

Overtime

Answer 12

An option to expand the operating capacity when too little capacity was scheduled into production

Use when demand > OC to meet excess

Use when demand > FC as well

Have less OC and use more Overtime when actual demand < forecasted demand

Question 13

Lean manufacturing/just-in-time

Answer 13

To produce only the quantity of goods that is demanded by customers

Question 14

Stock outs

Answer 14

When there is insufficient inventory to meet customer demand, leading to potential sales loss and customer dissatisfaction

Question 15

Excess inventory

Answer 15

Surplus of inventory beyond current demand; causes financial costs and risks

Question 16

Costs of Production

Answer 16

Total cost a business incurs to either produce a product or offer its services

Question 17

Economies of Scale

Answer 17

A proportionate saving in costs gained by an increased level of production

Question 18

Balancing the accounting equation

Answer 18

Assets = Liabilities + Owner’s Equity

Question 19

Proforma Accounting

Answer 19

The proforma accounting incorporates hypothetical numbers of estimates. They are built into the data to give a picture of a company’s profits if certain nonrecurring items are excluded

Question 20

Balanced scorecard

Answer 20

It provides a single number that can be compared between companies

It is used as a main indicator for evaluating your performance in the market

Total performance = Financial performance * market performance * marketing effectiveness * investment in future * wealth * human resource management * asset management * manufacturing productivity * financial risk

Question 21

Profitability analysis

Answer 21

Process that helps one determine whether their business or element of the business is profitable

Used to allocate money more efficiently to increase the bottom line

When costs can be tied to an element of a business, it is called a cost object
- Region, product, department, etc.

The revenue linked to the cost object - cost = profit

Question 22

Depreciation

Answer 22

Accounting practice used to spread the cost of a tangible or physical asset over its useful life

How much of the asset’s value has been used up in any given time period

Allows businesses to spread the cost of physical assets (such as a piece of machinery or a fleet of cars) over a period of years for accounting and tax purposes.