PM2 Flashcards
(106 cards)
1
Q
What is scarcity in economics?
A
The limited nature of society’s resources
2
Q
Define opportunity cost.
A
Measures the value of what is foregone (foregone alternatives)
3
Q
What are sunk costs?
A
Costs that are beyond recovery at the moment the decision is made
4
Q
What is the definition of management according to Mary Pagafoltet?
A
Managing is the art of getting things done through others
5
Q
What are the three important questions in marketing?
A
- What to produce?
- How to produce?
- For whom to produce?
6
Q
What is business economics?
A
The study of how to make business decisions
7
Q
What should costs never exceed according to business economics?
A
The benefits of it
8
Q
What are the three levels of management?
A
- Strategy Management (Top Management)
- Tactical Management (Middle Management)
- Operational Management (Lower Management)
9
Q
What is market failure?
A
When the market fails to produce an efficient allocation of resources on its own
10
Q
What is economic growth?
A
Increase in the amounts of goods and services over a period
11
Q
What does GDP per head measure?
A
Living standards
12
Q
What is the definition of elasticity in economics?
A
Change in price leads to change in demand
13
Q
What does inflation describe?
A
A situation in which the economy’s overall price level is rising
14
Q
What is the purpose of PESTLE analysis?
A
To carry out a macro analysis
15
Q
List the components of PESTLE analysis.
A
- Political factors
- Economic factors
- Social and cultural factors
- Technological factors
- Legal factors
- Environmental factors
16
Q
What is the function of tariffs?
A
A tax on foreign goods and services entering a country
17
Q
What does the term ‘BRIC’ refer to?
A
Emerging markets: Brazil, Russia, India, China
18
Q
What is the definition of monopolistic power?
A
The ability of a single or small group of firms to charge significantly higher prices due to lack of competition
19
Q
What are negative externalities?
A
Effects determined to others that keep costs as low as possible
20
Q
What is the law of supply?
A
Higher price leads to higher supply of the product
21
Q
Define marginal cost.
A
The increase in the total cost that arises from an extra unit of production
22
Q
What is economic profit?
A
Total revenue minus total costs, including implicit costs
23
Q
What is the production function?
A
Shows the amount of output produced given different combinations of factor inputs
24
Q
What are the factors of production?
A
- Land
- Labor
- Capital
25
What is the difference between a market and an industry?
An industry is a collection of companies that create a product or service; a market is where buyers and sellers meet to exchange goods and services
26
What is a monopoly?
A firm that is the sole seller of a product without close substitutes
27
What are the implications of monopoly power?
Distorts markets and can lead to inefficiencies
28
What is the relationship between government and business?
The government makes rules, spends money, and taxes individuals and corporations
29
List reasons for government intervention in markets.
* Unfair profits
* Unsafe working conditions
* Unsafe products
* Economic instability
* Environmental damage
30
What is the definition of market equilibrium?
The price where quantity supplied equals quantity demanded
31
What happens when price is above equilibrium?
Surplus
32
What happens when price is below equilibrium?
Shortage
33
What does 'VUCA' stand for?
Volatile, Unstable, Changing, Ambiguous
34
What is the definition of a claimant count?
People who claim to be employed or unemployed
35
What is the purpose of market forces of supply and demand?
To determine the quantity of each good produced and the price at which it is sold
36
What is the difference between explicit and implicit costs?
* Explicit costs require an outlay of money
* Implicit costs do not require an outlay of money
37
What is the definition of average total cost?
Total cost divided by the quantity of output
38
What does the term 'short run' refer to in production?
Some factors of production cannot be changed (fixed costs)
39
What is the significance of marginal revenue?
The change in total revenue from the sale of each additional unit of output
40
What are internal economies of scale?
Economies that are unique to a firm
41
What are external economies of scale?
Economies of scale faced by an entire industry
42
What does the law of demand state?
Higher price leads to lower demand
43
What is the difference between a shutdown and an exit decision?
Shutdown is a short-run decision; exit is a long-run decision to leave the market
44
What is a monopoly?
A single firm supplying a good or service to an entire market at a lower cost than two or more firms
## Footnote
Monopolies take advantage of economies of scale.
45
What is external growth in the context of monopolies?
Acquisition, merger, or takeover leading to increased industry concentration.
46
Where does monopoly fall on the competition spectrum?
Monopoly is at one end of the imperfect competition spectrum.
47
True or False: Monopolies can exert power even if they do not control the whole market.
True
48
What are some implications of monopolies for society?
They distort markets and may lead to inefficiencies.
49
How can governments respond to monopoly inefficiencies?
By using competition law and regulating the prices that the monopoly charges.
50
What is an oligopoly?
A market structure where a few firms share a large proportion of the industry.
51
What is collusion in the context of oligopolies?
An illegal agreement among firms to divide the market, set prices, or limit production.
52
What is a duopoly?
A market with only a few dominant sellers, specifically an oligopoly with two members.
53
What is barter?
An act of trading goods or services between two or more parties without the use of money.
54
Define marketing.
A form of exchange where something is received in return for something given.
55
What is customer satisfaction?
Creation of a stream of exchange; organizational success depends on it.
56
What is customer delightment?
Surpassing the expectations of customers.
57
List the core principles of marketing.
* Search for market opportunities
* Customer focused
* Integrated effort of all company departments
58
What are the performance metrics for marketing?
* Sales growth
* Market share
* Profitability
* Overall business performance
* International performance
59
What characterizes market-driven businesses?
* Customer concern throughout the business
* Knowledge of customers' choice criteria
* Investment in market research
* Striving for competitive advantage
60
What is efficiency in marketing?
Input divided by output, concerned with doing things right.
61
What is effectiveness in marketing?
Objective divided by output, means doing the right things.
62
Fill in the blank: Customer loyalty is the response a customer shows over time, leading to _______.
repeat purchases.
63
What are the stages in the consumer decision-making process?
* Need recognition or problem awareness
* Information search
* Evaluation of alternatives
* Purchase
* Post-purchase evaluation
64
What are the roles in the buying center?
* Initiator
* Influencer
* Decider
* Buyer
* User
65
What is B2B marketing?
Organizational buying process where organizations establish the need for purchased products and services.
66
List the three types of B2B markets.
* Industrial Markets
* Reseller Markets
* Government and Institutional Markets
67
What are the four segmentation techniques?
* Demographic
* Geographic
* Psychographic
* Behavioral
68
What does market positioning refer to?
Establishing the image or identity of a brand or product in consumers' minds.
69
What is brand equity?
The premium value generated from the brand compared to a generic equivalent.
70
What is the role of brands?
* Identification
* Perception filter
* Risk reduction
* Consumer loyalty
* Competitive advantage
71
What are the key branding decisions?
* Brand name strategies
* Brand architecture strategies
* Rebranding
72
What is relationship marketing?
Creating, maintaining, and enhancing strong relationships with customers.
73
What is the nature of services?
Any act or performance offered that is intangible and does not result in ownership.
74
What are the characteristics of services?
* Intangibility
* Perishability
* Inseparability
* Variability
75
What is customer relationship management (CRM)?
Methodologies and technologies used by companies to manage customer relationships.
76
What are the pricing methods mentioned?
* Cost
* Competition
* Marketing
77
What is cost-oriented pricing?
Pricing based on the costs incurred to produce the product.
78
What is competitor-oriented pricing?
Setting prices based on competitors' pricing strategies.
79
What are the three primary pricing methods?
Costs, Competition, Marketing
80
What does cost-oriented pricing involve?
Calculating costs to determine price
## Footnote
Includes methods like full cost pricing and direct-cost pricing.
81
What is full cost pricing?
Pricing based on total costs including fixed and variable costs
82
What is direct-cost (marginal cost) pricing?
Involves only those costs likely to rise with output increases, with a markup added
83
What is competitor-oriented pricing?
Setting prices based on competitors' pricing strategies
84
What is market-oriented pricing?
Pricing based on market demand and consumer willingness to pay
85
What is the usual pricing objective for new products?
To gain profitable market penetration
86
What are the key decisions in launching new products?
Choice of target market, creation of a differential advantage
87
What are characteristics of high price market segments?
* Product provides high value
* Customers have high ability to pay
* Consumer and bill payer are different
* Lack of competition
* Excess demand
* High pressure to buy
* Switching costs
88
What conditions allow for charging a low price?
* Only feasible alternative
* Market presence or domination
* Experience curve effect/low costs
* Make money later
* Make money elsewhere
* Barrier to entry
* Predation
89
What are some ethical issues in pricing?
* Price fixing
* Predatory pricing
* Deceptive pricing
* Price discrimination
* Penetration pricing and obesity
* Product dumping
90
What are the newest channels for digital marketing?
Digital channels for selling directly to customers
91
What are marketing communications?
Means by which firms inform, persuade, and remind consumers about products and brands
92
What is direct marketing communications?
Marketing where a company contacts individual customers directly
93
What is integrated marketing communications?
Coordinating brand messages across different tools and media channels
94
What is personal selling?
Personal interaction by the sales force to engage customers and build relationships
95
What does public relations involve?
Building good relations with various publics and managing the company's image
96
What are the key dimensions of the digital age in marketing?
* Direct and digital marketing
* Engaging with targeted consumers
* Building lasting customer relationships
97
What is the communication process in marketing?
* Identify the target audience
* Determine communication objectives
* Design the message
* Choose the media
* Select the message source
98
What are the three types of message appeals?
* Rational appeal
* Emotional appeal
* Moral appeal
99
What are channel intermediaries?
Organizations that facilitate product distribution to customers
100
What functions do channel intermediaries serve?
* Reconciling needs of producers and consumers
* Improving efficiency
* Improving accessibility
* Providing specialist services
101
What influences the development of mission statements?
* Customer groups being served
* Macroenvironmental changes
* Company background and leadership personalities
102
What are the forces in an external marketing audit's macroenvironment?
* Political/legal
* Economic
* Ecological/physical/environmental
* Social/cultural
* Technological
103
What are the key elements of a SWOT analysis?
* Strengths
* Weaknesses
* Opportunities
* Threats
104
What are the strategic objectives for each product?
* Build
* Hold
* Harvest
* Divest
105
What triggers expansion to global markets?
* Saturated domestic markets
* Small domestic markets
* Low growth domestic markets
* Customer drivers
* Competitive forces
* Cost factors
* Portfolio balance
106
What is the standardization versus adaptation debate in international marketing strategy?
Standardize where possible, adapt where necessary
