Marketing and Finance Content Flashcards
(133 cards)
1
Q
What is marketing?
A
System of activities that plan, price, promote and distribute products to customers.
2
Q
What is the role of marketing?
A
- Its role is to develop goods that satisfy customer needs and thus build loyal customer base, increase brand visibility, and differentiate products from its competitors.
3
Q
Describe the interdependence of marketing with other key business functions.
A
- Marketing provides funds for finance and finance distributes funds to other functions including marketing. Marketing determines product pricing and differentiation which operations follow and operations sets physical constraints for marketing such as minimum selling price. Marketing sets goals for operations which affect staff needs. Human resources organise staff for this and for marketing jobs.
4
Q
What is the production approach?
A
concentrated on meeting market demands, “supply creates demand”, focus on creating high quality products through consistency, mass marketing, economies of scale.
5
Q
What is the selling approach?
A
convince customers of products benefit, door-to-door sales representatives, aggressive thus low customer satisfaction
6
Q
What is the marketing approach?
A
customer centred approach, products created to satisfy customer needs, requires market research to find customer needs, buying patterns and location, marketing must make it that customers believe the price is justified by the quality of a product.
7
Q
What is the resource market?
A
production and sales of raw materials
8
Q
What is the industrial market
A
businesses that purchase or sell products for use in other products or daily operations.
9
Q
What is the intermediate market
A
organisations or people that buy finished products and sell them for profit. E.g. retailers
10
Q
What is the consumer market?
A
- Consumer market: where businesses sell products directly to customers. Can be divided into mass and niche markets.
11
Q
What is the mass market
A
products are aimed at all customers regardless of age, gender, location. E.g. water/electricity.
12
Q
what are niche markets?
A
narrowly selected target market. Consumer usually has very specific needs. E.g. rare or expensive items.
13
Q
What are psychological factors?
A
- Psychological factors are those within individuals that affect buying behaviour. E.g. +/- perceptions of a product.
14
Q
What are sociocultural factors?
A
forces exerted by other people or groups. E.g. socioeconomic status, culture, reference group.
15
Q
What are economic factors?
A
influence a businesses ability to compete and a customer’s willingness to spend. E.g. boom/recession
16
Q
What are government factors?
A
Govt regulations in consumer protection and fair competition. E.g. age restrictions and health standards.
17
Q
What is the CCA
A
The “Competition and Consumer Act 2010” (CCA) protects customers from practices such as misleading advertising or misrepresentation of product contents. It also regulates trade practices that restrict competition. E.g. price fixing.
18
Q
What is deceptive and misleading advertising?
A
creates inaccurate impression about product characteristics to convince customers to purchase product. E.g. bait and switch.
19
Q
What is price discrimination?
A
setting different prices for product in separate markets potentially for geographical (city and country prices) or product differentiation reasons (different electricity prices for domestic and business users). Illegal where it can substantially reduce competition (e.g. products sold cheaper to larger chains but not for smaller retailers. Students, pensioners.
20
Q
What are implied conditions?
A
unspoken and unwritten terms of contract that are assumed to exist. E.g. that a product fits its description.
21
Q
What are warranties
A
voluntary promises offered by the seller. Enforced by ACL. Shows that a business is confident in product quality.
22
Q
What is truth and accuracy?
A
Truth: actual verified facts accepted by most, Accuracy: condition of being true, correct or exact.
23
Q
What is puffery?
A
Puffery describes wildly exaggerated, fanciful or vague claims about a product that no one could believe. Not considered deceptive or misleading under CCA.
24
Q
What is good taste in advertising?
A
Good taste in adverts is subjective. What is offensive to one is not always offensive to others. Advertising in public media is restricted by the same censorship rules as TV in regard to offensive language and adult content.
25
Describe rules in regard to products that may damage health.
The production and promotion of products that may damage health are regulated by laws. Not all products banned e.g. confectionary and cigarettes. However, harmful food must label ingredients and allergens to help customers, informed choices and cigarettes must be sold from a single register, covered, 18+.
26
What does it mean to engage in fair competition?
Engaging in fair competition: act in ways that don’t obstruct competition. Covered by CCA.
27
What is sugging?
selling under guise of market research. Salesperson approaches customer to “ask some questions” but then delivers sales pitch and pressures customer to buy. Unethical but legal.
28
What is a situational analysis?
take snapshot of current market conditions
29
What is a SWOT analysis
examines business current position in market. Internal (strength, weakness), external (opportunities, threats).
30
What is the product life cycle?
the common stages a product goes through. Intro: low sales, cash losses, few competitors, heavy marketing. Growth: increasing sales, profit, customers and competitors. Maturity: Sales peak, high profit, differentiation, price wars. Decline: sales, profit and customers fall, niche. Stable products and products that start at maturity.
31
What is market research?
systematically collecting, recording and analysing information concerning specific marketing problem. Primary, secondary, qualitative and quantitative.
32
Describe establishing marketing objectives.
Establishing market objectives involves creating marketing goals that are related to overall business objectives and are SMART.
33
What is a target market?
A target market is a group with a certain shared characteristics to whom a business’s products are targeted at.
34
What are marketing strategies?
Marketing strategies are the main plans of action for achieving marketing objectives. Based on 4 P’s.
35
What is implementation?
Implementation is the process of putting marketing strategies into practice.
36
What is monitoring?
Monitoring involves comparing planned performance against actual performance.
37
What is controlling?
Controlling involves taking action if actual performance deviates from what is expected.
38
What are financial forecasts?
Financial forecasts are estimations of a businesses future financial situation based on current trends and known future events.
39
What does it mean to revise marketing strategies?
Revising marketing strategies involves changing strategies to ensure they meet marketing objectives and planned results.
40
What is market segmentation?
Market segmentation involves dividing the total market into segments where actual or potential customers are grouped.
41
What is positioning
Positioning describes how potential buyers perceive a product.
42
What is branding?
Branding has to do with raising awareness of a business and its products through a trademarked brand or logo.
43
What is packaging?
the physical appearance of a product. It protects the product, provides usage instructions and attracts customers.
44
What is cost based pricing?
takes production cost and adds a mark up.
45
What is market based pricing?
prices is based on supply and demand.
46
What is competition based pricing?
pricing is similar to competitors.
47
What is skimming?
Involves setting the highest price customers are willing to pay. Good for new/innovative products.
48
What is penetration?
prices are set as low as possible.
49
What is loss leaders?
Involves selling a product for minimal/negative profit to entice customers into buying other products.
50
What are price points?
Setting different prices for similar products that are differentiated by feature.
51
Consumers associate price with.....
Quality
52
What is promotion?
involves informing the market about a product, business or brand.
53
What is advertising?
paid non personal communication about products through mass mediums.
54
What is personal selling?
involves direct communication to get marketing messages to customers.
55
What is relationship marketing?
concerned with building long lasting relationships between business and customers.
56
What is sales promotion?
non media communication e.g. vouchers.
57
What is publicity?
a way of spreading information at large through media e.g. news.
58
What is public relations?
a planned effort to present a business in a positive light.
59
What are opinion leaders?
people or organisations with influence.
60
What is word of mouth?
a marketing technique which relies on verbal recommendation of a product
61
What is place?
the point where the sale or exchange with a consumer occurs.
62
What are distribution channels?
channels by which a product is moved from place of manufacture to the consumer.
63
What is intensive distribution?
involves making a product available in as many outlets as possible.
64
What is selective distribution?
involves using only a limited number of stores to sell products. Selected stores are generally consistent with the image the business is attempting to project.
65
What is exclusive distribution?
restricts the number and availability of products. Prestigious high status.
66
What is physical distribution?
the involved activities that move products from producer to consumer.
67
What is transportation?
the process of moving goods from one location to another.
68
What is warehousing?
the process of storing products before they’re distributed to the customer.
69
What is inventory?
Inventory is the finished goods.
70
What does people refer to?
the quality of interaction between the customer and those within a business.
71
What does process refer to?
the flow of activities that a business follows to deliver a service.
72
What is physical evidence?
everything that customers see when interacting with a business.
73
What is e-marketing?
marketing over the internet.
74
What is global branding?
a uniform brand used around the world.
75
What is standardisation
the strategy of using the same marketing mix for a product globally.
76
What is customisation?
the strategy of tailoring the marketing mix for a product sold globally for individual markets.
77
What is global pricing?
has to do with the price differences or consistencies for a product sold globally.
78
What is competitive positioning?
the process of a business determining how to differentiate itself from competitors and communicate these differences to consumers.
79
What is the strategic role of financial management?
to ensure a business continues to operate, grow and achieve its goals.
80
What is profitability?
the money a business makes from operations minus expenses. GP=Sales-COGS. NP=GP-Expenses.
81
What is growth?
a businesses ability to expand or increase activities.
82
What is efficiency?
refers to achieving maximum output with minimum input.
83
What is liquidity?
refers to how quickly assets can be converted to cash and therefore determines a businesses ability to pay off short term loans.
84
What is solvency?
refers to the ability of a business to meet long term obligations.
85
What are short term and long term financial objectives?
Short term financial objectives relate to that financial year while long term ones usually relate to a period of five years plus.
86
What are internal and external sources finances?
Internal sources of finance come from inside the business and external from outside.
87
What is retained profit?
an internal source of finance and is the money earned by a business that does not go to the owner or shareholders.
88
What are debt and equity finance? What are their advantages and disadvantages?
87. External finance has both debt and equity finance. Debt finance refers to money borrowed from people or institutions other than the owner. It has the advantage of being readily available but often comes at the risk of losing assets due to them being used as security. Equity finance comes from an owners claim on the assets of a business. It has the advantage of not requiring repayments and the disadvantage of providing lower profits and lower returns to the owner.
89
What are short term borrowings?
debt that will be repaid within twelve months. Useful for resolving cash flow shortages. The main types are overdrafts, commercial bills and factoring.
90
What are long term borrowings?
debt that will be repaid over a period longer than twelve months. Useful for purchases of large assets such as machinery and land. The main types are mortgage, debentures, unsecured notes, leasing
91
What are overdrafts?
Overdrafts are where a business is allowed to overdraw from an account and take on a negative balance. They are convenient but have high interest rates.
92
What are commercial bills?
written orders for loan amounts paid as a whole sum rather than in instalments. These bills are guaranteed by a bank.
93
What is factoring?
the sale of a business’s accounts receivable to a factoring business at a discounted price. It improves liquidity but results in the business receiving back less than what they were initially owed.
94
What are mortgages?
obtained from banks or businesses lenders and have long repayment periods. They’re often used to purchase non-current assets that become the security for the loan.
95
What are debentures?
long-term debt finance obtained from investors where assets are used as security. Advantage: investors don’t have a say in business operations.
96
What are unsecured notes?
loans unsecured by assets. Require good reputations and creditworthiness to find investors.
97
What is leasing?
an agreement through which the owner of an asset lends this asset to an individual/business in return for periodic payments.
98
What are new issues?
New issues of shares in a public company require a prospectus which outlines what shareholders will receive in return for their investment. Shares are made public on the ASX and the company decides if shareholders get voting rights in the business.
99
What are rights issues?
given to current shareholders to offer them additional shares in the business to which the shareholder is not obligated to take.
100
What are placements?
the same as rights issues but additional shares are offered to only a select number of current shareholders.
101
What are share purchase plans?
the same as rights issues but shares are offered at a discount price.
102
What is private equity?
doesn’t come from the ASX but usually from other companies or individuals connected to the business in some way. Through this method, the business doesn’t incur debt, but ownership is decreased for current shareholders.
103
What are banks?
financial institutions licensed to receive deposits and make loans.
104
What are finance companies?
accept money from customers and use it to make loans.
105
What is superannuation?
money put aside for retirement.
106
What is life insurance?
a contract between an insurer and a policy holder where the insurer promises to pay a designated sum upon the death of the insured.
107
What is a unit trust?
an unincorporated mutual fund structure. This involves pooling money from multiple investors so that the fund can hold assets and provide profits that go directly to the unit owners.
108
What is the ASX?
acts as a primary market where public companies sell shares for the first time to investors as a way to raise funds.
109
What is ASIC?
an independent Commonwealth government body that administers the Australian Securities and Investments Commission Act 2001. ASIC regulates companies, financial markets, e.t.c in order to maintain and improve financial systems and the entities in it and administer the law.
110
What is the ATO?
a non-corporate commonwealth entity that mainly affects businesses through their administration of company tax which is a rate set by the Australian government on a company’s income.
111
What is economic outlook?
a global market influence that involves analysing projected changes to the level of economic growth throughout the world.
112
What is availability of funds?
a global market influence that refers to the ease with which a business can access funds on the international market.
113
What are interest rates?
a global market influence and are the cost of borrowing money.
114
What is financial planning?
an ongoing process of evaluating the current and future business state in order to assist sensible decisions being made.
115
What are financial needs?
refer to the amount of funding required to carry out business operations.
116
What is a budget?
a plan for achieving outcomes that is based on forecasted figures.
117
What are record systems?
receive, store, retrieve and disseminate information
118
What are financial risks?
potential future situations that could cause a business to lose money such as theft.
119
What are financial controls?
measures taken to minimise financial risks.
120
What should the different types of finance be used for ?
Long terms debt finance should be used to purchase non-current assets, overdrafts should be used for small amounts of inventory and utilities, credit cards should be used for stationary and utilities, accounts receivable and commercial bills should be used for large amounts of inventory.
121
What are cash flow statements?
indicates the movement of cash inflows and outflows from transactions over a period of time. These cashflows are usually separated by operating, investing and financing activities.
122
What are income statements?
show the operating results for a period. The main features are sales, COGS, gross profit, expenses and net profit.
123
What are balance sheets?
represent a business’s assets and liabilities at a point in time and therefore the businesses net worth. Their main features are current and non-current assets and liabilities and owners equity.
124
What are the different financial institutions?
Banks, finance companies, superannuation funds, life insurance companies, unit trusts and the ASX
125
What are the global market influences?
Economic outlook, availability of funds and interest rates.
126
What are the different marketing approaches?
Production, selling and marketing approach?
127
What are the types of markets?
Resource, industrial, intermediate, consumer, mass and niche.
128
What are the factors influencing customer choice?
psychological, sociocultural, economic and government.
129
What are the different consumer laws?
deceptive and misleading advertising, price discrimination, implied conditions and warranties.
130
What are the different global marketing strategies?
global branding, standardisation, customisation, global pricing and competitive positioning.
131
What are the different physical distribution issues?
Transporting, warehousing and inventory.
132
What are the different channel choices?
intensive, selective and exclusive.
133
What are the different ethical issues in marketing?
truth, accuracy, good taste in advertising, products that may damage health, engaging in fair competition and sugging.
