Business Ethics And Corporate Responsibility Marketing Essay

Describe the basic features that distinguish the three traditional forms of business ownership: sole proprietorships, general partnerships and C corporations.

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~Sole proprietorship is a business that is owned and managed by one individual. Earnings of the company are treated as income and debts that arise are personal debts. It is the most common type of business organization in United States.

~General partnership: In this type of business all partners have right to participate in management of the firm and share any profits or losses. There is no limit on number of partners but usually it’s two.

~C corporation is a legal entity, separate and distinct from its owners. It’s owned by stockholders. Its mission and objective are established by board of directors and board of directors is selected by stockholders to protect their interests.

Compare and contrast the advantages and disadvantages of sole proprietorships and general partnerships.

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~Both are easy to form, have tax advantages, and unlimited liability.

~General partnership has a stronger financial base than sole proprietorship.

~On the other hand, general partnership can be destroyed much easier than sole ~proprietorship because of disagreements between partners.

~ Another disadvantage in sole proprietorship is that workload and responsibilities are on one person while in partnership it’s shared.

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What advantages help explain why virtually all large companies are organized as C corporations?

~Corporations can raise huge amount of financial capital

~It’s easy for stockholders to withdraw from ownership or sell shares of stock

~Stockholders have limited liability. They are not personally liable for the debts of the company.

What steps are involved in starting a general corporation?

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~Requires filing form called the articles of incorporation, with a specific state agency.

~Pay filling fees and establish corporate bylaws-basic the basic rules governing how a corporation is organized and how it manages its business.

~Companies also choose corporation friendly states, because not all states are friendly and charge a lot of money.

How is a corporation’s board of directors chosen? Explain the role the board plays in a corporation’s management.

~ According to corporate bylaws stockholders elect board of directors that they rely on to manage company and protect their interests.

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~Board of directors establishes the corporation’s mission and sets its broad objectives.

~Board of directors then assigns the chief of executive officer and other corporate officers to manage company.

Explain how S corporations, statutory closed corporations, and nonprofit corporations differ from C corporations.

~S corporation: IRS does not tax earning separately, can have no more than 100 stockholders, each stockholder have to be U.S. citizen or permanent resident.

~Statutory close corporation: Doesn’t have to elect a board of directors or hold annual stockholders meetings, number of stockholders are limited to 50, stockholders can’t sell their shares to public without first offering to existing owners, not all states allow this type of corporation.

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~Nonprofit corporation: Has members but not stockholders, cannot contribute funds to a political campaign, must keep accurate records, earnings are exempt from federal and state income, make tax deduction for individuals who contribute money or property.

What are the three different types of corporate mergers? What is the rationale for each type?

~Horizontal merger: Combination of firms in the same industry.

~Vertical merger: Combination of companies with buyer-seller relationship.

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~Conglomerate merger: Combination of unrelated companies.

Compare an S corporation with a limited liability company. Why do you think limited liability companies are currently more popular than S corporations?

~While S corporation has limited numbers of owners, Limited Liability Company can have any number of owners. Unlike S corporation, owners of LLC can be foreign investors and other corporations.

What is a business format franchise? What are the roles of the franchisor and franchisee in this arrangement?

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~Business format franchise is an agreement in which the franchisee pays for the right to use the name, trademark and has to operate business according to the rules and principles of franchisor.

~Franchisor is owner and has to train and provide support franchisee; responsible for name brand recognition.

~Franchisee- has right to use franchisors name, trademarks, and patents; must follow methods and all the rules of franchisor; attend training meetings

What are the main advantages and disadvantages of franchising arrangements for the franchisee? For the franchisor?

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~Advantages for franchisee: less risk, training and support from franchisor, easier to borrow money from a bank

~Disadvantages for franchisee: Costs are very high, very little control, have to sell only what company sells, risk-not all companies live to their promises, growth challenges

~Advantages for franchisor: can expand the business to bring extra revenue without using own money.

~Disadvantages for franchisor: irresponsible behavior of franchisee cans cost companies success.

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Chapter Seven

Small Business and Entrepreneurship:

Economic Rocket Fuel:

Review Questions

Review the benefits an entrepreneur might seek in starting a new business. Which benefits are most appealing to you? Why?

~Greater financial success, independence, flexibility, challenge, survival.

~The benefits that appeal to me are independence, flexibility, and financial success.

Do you recognize any of the entrepreneurial personality characteristics in yourselves? Which ones? Do you think it’s possible for a person to develop the characteristics that he or she lacks? Why or why not?

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~Yes, I have few of entrepreneurial personality characteristics and they are self-reliance, confidence, energy, and tolerance of failure.

~I think it is hard but possible for a person to develop skills he or she lacks. It all depends on how bad that person wants to learn new skills that she or she doesn’t have.

What role does failure sometimes play in entrepreneurial success? What can an entrepreneur gain from failure?

~Entrepreneurs see failure as a chance to learn and succeed.

Compare the opportunities and threats that small businesses face. Which opportunities are most compelling? Which threats are most intimidating? Why?

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~Opportunities: Market niches, personal costumer service, lower overhead costs, technology.

~Threats: High risk of failure, lack of knowledge and experience, too little money, bigger

~Bigger regulatory burden, higher health insurance costs.

~Opportunity that compelling is personal customer service because with it small business owner can build personal relationship with a customer. Another opportunity that is compelling is lower overhead costs because no one wants to spend huge amount of money and wants to spend as less as possible.

~The biggest threat that is intimidating is high risk of failure. When someone starts a business, he or she wants to succeed and not to fail. People are scared of

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loosing even if they are tolerant to failure. Those that tolerant to failure don’t give easily up like others do.

Review the definition of niche marketer, and cite three examples of niche marketers. How has technology affected niche marketing?

~Market niche is a small segment of a market with fewer competitors than the market as a whole and tend to be more attractive to small firms.

~Organic cosmetics, Google, E-bay.

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~Technology plays very important role today, because internet helped people to open new businesses and at the same time create more customers. It is good for businesses because they spend less money and grow faster.

If you were to launch a new business, would you start from scratch, buy an established independent business, or buy a franchise? Why?

~I would launch a new business from a scratch. I know there are a lot of risks but I would want to be my own boss and make my decisions.

How could you convince family and friends to support your new business launch? What kind of assurances would they need? What could you do to keep the funding relationships professional?

~First of all I would educate myself, learn from others, gain experience, and the most important create a business plan.

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Beyond personal resources, what are other funding options for small businesses? Why don’t more entrepreneurs tap into these resources?

~Bank loans, angel investors, and venture capital firms.

~The reason that entrepreneurs are trying to avoid other resources besides personal is because they cause more headaches. Personal resources are probably the easiest to deal with.

What are the key contributions of small business to the U.S. economy? Rank the benefits in terms of importance, and provide the reasons for your ranking.

~Small businesses play very important role in U.S. economy because they create new jobs, create new innovations at twice the rate of their big business counterparts, and they tend to find opportunities by offering products or services where big companies don’t.

What factors account for the dramatic differences in entrepreneurship rates around the world? Do you think entrepreneurship will continue to grow worldwide? Why or why not?

~Key factors that plays important role in different entrepreneurship rates around the world are national per capita income, entrepreneurs’ opportunity costs, and how much cultural and political environment supports entrepreneurs.

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Chapter Eleven

Marketing:

Building Profitable Connections with Your Customer

Review Questions

How does the American Marketing Association define marketing? How can marketers deliver value to their customers over the long term?

~The American Association defines marketing as an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

~In order to deliver value to customers over the long term marketers must to fill customers need and in the way exceed customer’s expectations.

What are the four different kinds of utility that marketers can provide? Give an example (not from the book) of a product that delivers each type of utility.

~Form utility: iPhone

~Time utility: Walgreens 24/7

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~Place utility: Cafeteria on campus

~Ownership utility: Laptop

What are the key categories of non-traditional marketing? Do you expect these areas to grow over the next decade? Why or why not?

~People, place, event, and idea marketing.

~I think that these areas will grow over decade because people’s interests change with each generation. Technology also changes and grows.

How has marketing evolved over time? How have current events, economics, and culture influenced thinking about marketing?

~Marketing developed through different phases: production era, selling era, marketing era, and relationship era.

~During marketing era concept of marketing was born and now it’s growing more and more. Now, customer satisfactions became centerpiece of marketing.

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What are the key characteristics of a high potential target market? Is the biggest target market always the best? Why or why not?

~Size: need to have enough people to support business.

~Profitability: willingness of a customer to pay more than the cost of producing product.

~Accessibility: target needs to be reachable

~Limited competition: look for markets with limited competition

~I think that bigger market is always good because there are more people to support business and bring more profit to the company. Company can also use that money to build bigger target market by creating new products.

What are the different ways to segment a consumer market? Does it make sense to use more than one segmentation variable? Why or why not?

~Demographic: dividing market based on peoples age, income, ethnicity, and gender.

~Geographic: dividing market into smaller groups depending where costumers live.

~Psychographic: dividing by groups based on costumer interests, values, attitudes, and lifestyles.

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~Behavioral: dividing into groups based on how people react to the products

~It does make sense to use more than one segmentation, for example, demographic and psychographic.

Describe the four elements of the marketing mix. What role does each element play in delivering value to customers?

~Product strategy: creating name, product image, package design, customer service, guarantees, new product development, and much more.

~Pricing strategy: price must be fair

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~Distribution strategy: delivering a product to the right people, in the right quantities, at the right time and place.

~Promotion strategy: find effective way to promote product.

~All of these four elements play very important role in delivering value to customer.

What are the five key dimensions of the marketing environment? How can marketers stay abreast of changes in each area?

~Competitive, economic, social/cultural, technological, political/legal.

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~To stay on top of the things marketers must monitor each element of marketing environment and respond quickly and efficiently to change.

Outline the steps in the consumer decision-making process. How can the marketer influence each step?

~Recognition: recognize need

Information Search: previous experience with brands, family, friends

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Evaluation of Alternatives: price, quality

Purchase decision: buys item because it was on sale and return policy is great

Post purchase behavior: satisfied or not

~Marketer can influence each step by learning cultural, social, personal, and psychological life of customers.

What are the key differences between primary and secondary data? Compare the benefits and drawbacks of each.

~Secondary data is existing data that marketers gather or purchase for a research project. Primary data is new data that marketers gather for a specific research project.

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~Secondary data: Advantages- low cost

Disadvantages- may not meet specific need, outdated, available to competitors

~Primary data: Advantages-customized to meet specific need, fresh and new, not available to anyone

Disadvantages-more expensive

Chapter Twelve

Product Strategy:

Delivering More Value

Review Questions

Review the marketing definition of product. Why do you think marketers define product so broadly? How does the definition of product affect quality?

~Product is anything that company offers to satisfy customers needs and wants; including both goods and services.

~I think marketers define product so broadly because it is made for one purpose only- to satisfy customer, whether it’s a good or service. So, when consumer buys a product he or she buys attributes associated with the product.

~If a product satisfies customer it’s good quality for that customer and if customer dissatisfied by product than its bad quality for him or her.

Think of three different services that you use on a regular basis (e.g. a restaurant, a dental office). How does the service provider suggest in advance that the service will be high quality?

~Restaurant: advertisement, friendly staff

~Hair stylist: nicely designed salon, professional look

~Dental office: friendly and helpful staff

Pure

Goods

Pure

ServiceDraw a goods and services spectrum, and determine where to place the following products along the spectrum: a nightclub, a new motorcycle, a designer shoe store, an Internet search engine, a new snowboard, and a photography class. What are the reasons for your choices?

new motorcycle designer shoe store internet search engine

new snowboard night club photography class

~New motorcycle and snowboard are pure goods.

~Designer shoe store and night club are service with goods.

~Internet search engine and photography class are pure service.

What are the marketing benefits of identifying the actual product, the core product, and the augmented product?

~Actual product: the actual product itself and its uniqueness

~Core product: satisfies customers needs

~Augmented product: additional good or service to sharpen competitive edge (warrantees, manuals, etc.)

List five examples of products that are commonly purchased as either business products or consumer products. How would the classification impact the marketing strategy?

~Computer, phone, table, truck, cleaning service

~Consumer products purchased for personal use and business products purchased to produce another product or service.

~Consumer classifications are convenience product, shopping products, specialty, products, and unsought products.

~Business product classification are installations; accessory equipment; maintenance, repair, and operating products; raw materials; components and processed materials; and business services.

Why are product line and product mix decisions so important? What are the risks of making poor decisions regarding these factors?

~Product line and product mix are very important if company wants to make good profit by making customer happy.

~Poor decision regarding these factors might cause company to loose its profits.

Would it ever make sense for a firm to offer a new product line that they know would cannibalize an existing line? Explain your answer.

~I don’t think it make any sense, especially if company knows that that new product line will cannibalize existing line why even create it. Company can loose a lot of money.

Think of one of your favorite brand names. Does the brand name fit the characteristics of an excellent name? Do you think it matters? Why or why not?

~100% Pure. Yes, I think brand name fits characteristics of an excellent name because it’s short and easy to remember.

~I do not think it’s a must for a company to fit characteristics of an excellent name because another company I really like called Dr. Hauschka. The name is hard to pronounce and hard to memorize but I love Dr. Hauschka’ products.

What are the three different levels of product innovation? Which is most common? Can a business survive long term with only continuous innovation? Why or why not?

~Discontinuous Innovation, dynamically continuous innovation, continuous innovation.

~I think that most common are continuous innovation and dynamically continuous innovation.

~I think it is possible to survive long term with only continuous innovation because the goal of it to create product better than competitor. For example, Lifeway kefir company it’s getting better and better adding more products different flavors and so on.

What are the four stages of the product life cycle? How does product life cycle stage impact marketing strategy?

~Introduction, Growth, Maturity, Decline

~Life cycle help marketers plan effective strategies for existing products and identify profitable categories for new products.

Chapter Thirteen

Distribution and Pricing: Right Product, Right Person, Right Place, Right Price

Review Questions

Explain the difference between channel of distribution and physical distribution.

~Channel distribution is the path that a product takes from the producer to the consumer, while physical distribution is the actual movement of products that path.

Explain the role of channel intermediaries in the product distribution process. Why is their role important?

~Channel intermediaries are distribution organizations that help to move products from factories to the consumers.

How do intermediaries add value to the products they distribute? Find an example of a distributor that adds each of the six types of utility.

~They add value by reducing the number of transactions and the associated costs required for goods to flow from producer to consumer. Distributors also can add form, time, place, ownership, information, and service utilities.

~Wal-Mart

What is the key difference between merchant wholesalers and agents/brokers? What are the risks and benefits of each approach for producers?

~Merchant wholesalers take legal title to the goods they distribute and reduce the risk for producer that the products might be damaged or stolen. Disadvantage for producers is that marketing strategies and pricing belong to wholesaler.

~ Agents and brokers don’t take legal ownership of the goods they distribute. Since agents and brokers don’t have legal ownership of goods, producers at higher risk, but they have more control over the product.

Do you think that the “shoppertainment” approach to retailing will continue to grow? Why or why not?

~Yes, I defiantly think that shopping and entertainment approach to retailing will continue to grow because it’s more fun for people to go to places where they can have fun or their kids. Even if prices are going to go up, people will still to come to such places. Even I want to go to places like Hershey Chocolate World.

Explain the differences among intensive, selective, and exclusive distribution strategies. Name an example of each that isn’t listed in the text.

~Intensive distribution involves placing products in as many stores as possible or stores themselves in many locations as possible.(gas stations)

~Selective distribution means placing product only in preferred stores and establishing stores in limited locations.(Home Depot)

~Exclusive distribution means establish one retail outlet in a given area.(Ikea)

Who benefits most from collaborative supply chain relationships? Explain your answer.

~Companies that specialize in helping other companies manage the supply chain. Many companies turned to supply chain to build a competitive edge but due to complication many firms choose to outsource challenge to experts.

Why is price such a difficult variable for marketers to control? What factors must they consider in setting prices?

~Price is hard for marketers to control because people have limited amount of money, so they can’t set high prices. The prices have to be as low as possible so that people would be willing to buy, but at the same time marketers, when determining the final price, must consider their costs, competitors, investors, taxes, and product strategies.

~Building profitability, boosting volume, matching the competition, creating prestige

Driving volume is a key pricing objective for many businesses. Find an example of a marketer that uses each of the volume oriented pricing strategies. Do you think this approach is effective? Why or why not?

~I don’t know any marketer that uses each of the volume oriented pricing strategies. I do not think that this approach would be effective.

How does a breakeven analysis help marketers determine the best price for their products? What other factors should be considered? Why?

~It’s a process that helps determine the number of units company must sell to cover all costs.

~At breakeven point company doesn’t make any profit so, breakeven analysis helps marketers get a sense where are they standing. So, to make a profit company needs consider factors: raise prices, decrease variable costs, decrease fixed costs.

Chapter Fourteen

Marketing Promotion: Delivering High-Impact Messages

Review Questions

How has marketing promotion evolved over the past decade? How has technology contributed to the changes?

~Promotion is marketing communication that influences consumers by informing, persuading, and reminding them about product. The effective promotion builds strong relationship between customers and companies, drawing customers back to the company again and again.

~Technology has empowered consumers to choose how and when they want to interact with media.

Why is integrated marketing communication such a challenge for marketers? How can marketers encourage teamwork and coordination?

~Because consumers combine messages from all sources to form unified impression of a product and marketer can’t control every massage consumer sees or hears about their product.

~Solid teamwork must begin from the top. Everyone who manages the marketing massage needs to have information about the customer, the product, the competition, the market, and the strategy of the organization. When all parties have access to the same data, they are more likely to be on the same page.

Do you think a rational or an emotional premise works better for marketing promotion? Why? Does your answer change across product categories? Use examples to support your perspective.

~I think that both rational and emotional premise works for marketing promotion, it’s just depends on the product. It’s more interesting when both are there and people like humor.

Why are the key risks and the potential rewards of product placement in both movies and television? Do think this promotional tool will continue to grow? Why or why not?

What ethical issues have emerged as marketers explore new ways of grabbing consumer attention? Use examples to support your points.

Do you think that cable television advertising spending will eventually eclipse network television advertising spending? Why or why not?

Given that each type of media offers strengths and drawbacks, what factors should you consider in developing a media plan for a specific product?

What are the advantages and disadvantages of publicity? Is it ethical for marketers to try to influence the media? Explain your answer.

What are the six stages in the selling process? What role does each stage play? Which stage do you believe is most important? Why?

How can you determine the right promotional mix for a specific good or service? What key factors should you consider?