Dynamic of Business - Assignment Example

MGT 1002 DYNAMICS OF BUSINESS 2 MID-TERM QUIZ Describe the steps involved in the marketing process. The steps involved in marketing process are market analysis, planning and setting of objectives, implementation of strategy, measurement of performance and controlling. 2. Marketing is different in B2B markets than in consumer markets. Identify and explain 3 differences between the B2B market and the consumer market B2B markets are those markets composed of businesses that conduct businesses with other business. Example for this is a supplier to a business entity. Consumer markets are composed of entities that sell products and services to the consumers. The three differences are purchasing motivation, length of marketing period and delivery methods. Motivation is meant the reason for purchase which in the case of B2B market is primarily driven by its supply chain whereas consumer market is driven to satisfy the needs and wants of its consumers. Marketing period also differs between B2B market and consumer market as B2B market is longer because of continuous nature of supply chain compared to consumer market that its needs and wants only needs to be satisfied. Delivery method also differs as B2B usually are done in bulk through cargoes and freight while consumer market are done through the place of marketing mix which could be the department store, grocery or specialty shop. 3. From a marketing management perspective, what is the meaning of a "total product offer"? What are the important elements in the total product offer of Northeastern University? “Total product offer” meant that a product has different dimensions or levels. These levels are augmented product, actual product and core product. Core product are the main benefit that the product offer to its consumer and is the reason why consumer will buy the product. For Northeastern University, the core product would mean the quality of its education. The actual product meant the list of benefits of the core product. In the case of Northeastern University, the list would mean, the curriculum, teachers, facility, library, campus and classrooms which are key in delivering the core product - education. The augmented product meant the additional non-tangible features that the product offer. In Northeastern University, it could be its standing and reputation in the academic community as well as in society in general. 4. Identify and describe the 6 parts of the accounting cycle. The six parts of the accounting cycle are; Analyze and journalize transactions – identification of an event as a transaction, transaction amount and accounts affected. Post the journal entries to the general ledger accounts – the recording of transaction in the journal as credit or debit. Prepare a trial balance – the calculation to verify that the amount of the debit is equal to credit. Journalize and post the adjusting entries – adjusting the entries for accruals and deferred items and posted in the T-accounts of the ledger. Prepare an adjusted trial balance – posting of the adjustments in the trial balance. Prepare financial statements – the transactions are summarized in the financial statements to reflect the economic condition of a business organization. Journalize and post the closing entries – transferring of the balance of temporary accounts such as revenues and expense to equity. 5. Identify the 3 key financial statements that corporations are required to prepare and describe the type of information found in each. The three financial statements that corporations required to prepare are income statement, balance sheet and statement of owner’s equity. Income Statement reflects the economic status of a business organization whether it is profiting or losing money. This is determined by the total revenue less the total expenses of a business. Balance Sheet on the other hand summarizes the company’s assets, liabilities and capital or owner’s equity at a given point of time. It is important to note that a company’s assets must equal to its liabilities and capital. The Statement of Owner’s equity on the other hand shows the changes to the company’s equity over a given period of time due to the operation of the business. It shows the beginning balance and closes with an ending balance that shows the changes of equity over a given period of time. In sum, these financial statements serves as a company’s scoreboard on how it performed. 6. Explain how publicity differs from advertising. What are the advantages and disadvantages of publicity in a firms promotion strategy? Publicity is the act of getting a media mileage and could either be planned or incidental. It could also be a part of a firm’s promotional strategy whereby news organizations are fed with information about the company. It is a media exposure wrought by various factors that is not paid for by the company whereby news organizations included the company in their news. Advertising on the other hand is a product of a carefully planned marketing strategy to favorably position the company in the market with the objective of gaining favorable impression to its target market to enhance its brand and sell its products. The advantage of a publicity in a company’s promotional strategy is that it does not cost that much and sometimes, it could be free (i.e. company breakthrough products). The disadvantage of a publicity is that the company has very little or no control over the kind of publicity that news organizations will air or publish. 7. What is financial management? Identify the key duties of the financial manager Financial management is the sound management of resources particularly money in the realization of a business organization’s objectives. The financial manager is primarily responsible for handling and managing of company’s funds that would be used to its optimum in realizing a company’s objective. He or she ensures that the company’s economic well-being is properly attended to. He or she is also responsible for stewarding the funds of the company into the various operations of the company that ensures that the various department has the necessary resources to operate and meet its objectives. 8. Explain the role of the operating budget, the capital budget and the cash budget play in financial planning. The operating details the projection of a company’s economic performance over a given period of time. These include the sales and revenues projected to be realized and the corresponding expenses over a given period of time. Capital budget on the other hand is the fund allocated for spending for the company’s long term investments that includes product development, acquisition of machines and research. Cash budget is the money allocated for a projected activity in a company ensuring that there is sufficient cash for its requirement. 9. Explain the major advantages and disadvantages of issuing stock as a source of long term financing. The major advantages of issuing stocks as a source of long term financing of a company is that it is able to provide needed capital for the operation and/or expansion of a business. Unlike borrowing in financial institutions such as banks, stocks are interest free. Stocks could also be a source of revenue of its owners especially when its valuation increases in the market. To understand the disadvantage of issuing stock as a source of long term financing, it must be understood first that stocks represents ownership of the company. Thus, the disadvantage however of issuing stocks as a source of long term financing is that the ownership of its incorporators or present owners are diluted when more owners through shares of stocks are accommodated into the company. The percentage of share ownership also lessens where the majority may no longer have the majority ownership due to the issuance of stocks. 10. Describe the 3 methods the Federal Reserve Bank uses to enact monetary policy and provide an explanation of the effects these methods have on the supply of money. The three methods the Federal Reserve Bank uses to enact monetary policy are Open Market Operations, Setting Discount Rate and Setting reserve Requirements. Federal Reserve Bank enact monetary policy through open market reserve by the act of selling and buying government securities in the market that influences the reserve of the banking system. Federal Reserve Bank is able to influence the interest rates in the market depending on the volume and price of marketable securities traded in the market as dictated by the principles of supply and demand. The second method to enact monetary policy is the discount rate which is the level of interest that banks pay for their short-term loans from a federal banks. Reserve requirements on the other hand are the amount of money that banks are required to have in their reserves against deposits. These monetary policies affect the money supply in various ways. Open market discount can mop the excessive liquidity in the monetary supply by increasing the volume of government issued marketable securities at a higher interest encouraging people to put their money in the marketable securities thereby reducing the money in the system. Discount rate on the other hand affects the money supply by either increasing or reducing its interest rates that financial institutions has to pay federal banks for their short term loan. Reducing interest rates would mean an increase in money supply as cost of money becomes cheap. Reserve requirements on the other hand can reduce the amount of money circulating by increasing the amount of required money to be held against deposits. Reducing reserve requirement can increase money supply because it will allow banks to give more loans to its customers. Read More