Lecture:

Marketing
Marketing: Planning and executing the development, pricing, and promotion and
distributions of ideas, goods, services to create exchanges that satisfy both buyers
and sellers objectives

Market making - Connect buyers and sellers
Value Creation- providing valuable products. Service profitably

*two underlying factors: Information and physical distribution**

Evolution of Marketing

-Production era: Up to early 1900s

-Selling Era- 1920s-1950s

-Marketing Concept era- 19502 -1990;s

-Customer relationship management - now

Elements in the marketing mix- 4Ps

Product - Goods, Services, Warranty
Price- List Price, Credit Terms
Place/distribution - Channel Type, Market Leverage
Promotion- Objectives, Advertising

Disney Case Study:
Product- Services

-Escape and entertainment

-Addresses emotional needs of children and parents alike
Price -

-Resorts for one target segment (Family packages)


-Movies and Merchandise for those who cannot afford the destination and
resorts packages
Place:

-Channels for distribution of travel

-Movie studio promotion and distribution

-the Disney Store
Promotion

-Cross Promotion

-eg. Includes a free planning DVD
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The Marketing Process

Find a need -> Conduct Research -> Identify a target market ->

Applying the marketing Process
1. Find a need
2. conduct research

3.
4.
5.
6.
7.
8.
9.

identify a target market

design a product to meet the need
determine a brand name
set a price
select a distribution system
design a promotional program
build relationship with costumers

Market Research Process
-Research - who, what, where

define the question?


eg. how to get more buyers
-Collect the data
-Analyze the Data
-Choose the best solution and implement it

Segmented Consumer Markets
-Geographic
-Demographic
-Physiographic
-Product related

Target: An Example
Age Compression, an attempt to sell products to an age group that is not
usually considered an appropriate target market
Tweens (9-13) spend 2Billion annually in Canada

Produce Lines and Mix
Product mix
group of products a company sells
Product Line
a group of similar products intended for a similar group of buyers

Product differentiation
-an attempt by companies to be different in the market

Branding and brand equity
Trademark
brand equity
brand Loyalty
Brand awareness

Pricing objectives in Market mix
Profitability - profit to increase
volume
prestige- highest retail price

meeting competition - pricing according to what competitors do

Pricing objectives
Ultimate goal of all marketing activity to increase sales + profit
each product requires a certain standard

Other Price Strategies
skimming
penetration strategy
everyday low pricing
high-low pricing
bundling
psychological pricing
price leadership

Non Pricing
pricing not always used to attract customers
markertors are increasingly using non-price tactics since the difference in
price on some competitive products is very small

Importance of channels of distribution
distribution
channel of distribution
intermediaries

Retail distribution strategy
intensive
selective
exclusive

The Promotion mix
Promotion attempts to engage potential costumers in an information
exchange

Next set of Lectures: Finance

Importance of financial information
accounting is the recording, classifying, summarizing and interpreting of
financial transactions and events

Users of financial information
investors - analyze the business
fax- regulation + monitoring taxes
Managers - Financial reports pinpoints problems/opportunities

Areas of Accounting:

Managerial - Internal
Financial - External

[ GAAP ] - Generally Accepted Accounting Principles

Types of Accountants

Public:
auditing
tax consulting + compliance
management consulting

Private:
Management accounting
government accounting
academics

BookKeeping Vs. Accounting


+ Bookkeeping is the recording of transactions while accounting is
the interpreting and analyzing afterwards

Balance Sheet - What Businesses OWN vs. What they OWE vs. What they are Worth

Liquidity ratios:

Current Ratio = Current Assets / current Liabilities

Quick Ratio = Cash + Marketable securities + receivables / Current Liabilities

Long term Solvency = Total Liabilities / total Equity

Profitability Ratios
Profitability = operating success

Return on Sales = Net Income /Net Sales

Return on Equity = Net Income / Owners Equity

Activity ratios (Efficiency)

Inventory turnover = Cost of goods sold / Avg. Inventory

Next Set of Lectures: Accounting

Why did the loonie drop?

 US economy gaining strength

Japanese Yen dropped in relation to US economy
Overall impact on Canadians
Boosts Economy
Shopping + Holiday down south = Dollar buys less
When Economy Does better through export it boosts consumer confidence,
meaning more spending

Learning Objectives:
1. Accounting equation
2. principles of financial equations

Cost Principle
Assets or services should initially be recorded at their actual cost
because it allows reliable financial statements

Revenue Recognition
Recorded when it has been earned
when good is actually delivered to costumer

Match Principle
Expenses should math revenue
Benefit expenses shows on income statement
when you benefit, you report it

+ Causes for differences between income (Net) and cash flow:
selling items on credit
acquired interest
Sales made where cash payments have not been received

Cooking the books
Early recognition of revenue
late recognition of expenses

Annual Report
How to read a corporate annual report
analyze the income statement
review statement of chafes in cash flow
review firms consolidating balance sheet

Business Strategy

basic concepts of strategy
competitive advantage
operating with an attribute or set of attributes that allow an
organization to outperform its rivals
Sustainable competitive advantage

One that is difficult for competitors to imitate

Strategies Vs. Tactics
Strategies = Long Term (Big Picture)
Tactics = Short Term

Strategy formulation and implementation in strategic management process
SF = Creating strategies
SI- Putting strategies in action

+ Steps of strategy formulation
1. identify
2. analyze
3. revise
4. implement
5. evaluate

+SWOT Analysis

Strengths - Manufacturing efficiency, Strong Finances

Weaknesses - Facilities? , Weak Management

Opportunities- New Markets, Strong Economy

Threats- competitors, new regulations, substitutes

[Exam tip: Substantiate your decision and give rationale]

+The Financial System

*Class Example: Apple Earnings Disappoint


-Projected sales were too high
5C more revenue while 5S more margin
+Financial Management

Finance- Function in organization that squires planning, obtaining, and
managing the companies funds

+Financial Planning process

Forecast Cash Flow: -short term +Long term uses > Budget Cash needs:
Operating, cash + capital > Control Differences:Actual vs projected flows >
Comapre results: Modify Forecasts & budgets

*Financial Controls


-Comparison of actual revenues, cats and expenses with
the budget


+ Budget Process

Types of Budgets


+ Operating (master)


+Capital


+Cash
+Need for operating funds
Managing day-by-day needs of the business
controlling credit operations
acquiring inventory
making capital expenditures

+Source of funds

Short Term
Trade Credit
promissory note
family +friends
financial institutions
short-term loans
factoring
commercial paper

Long Term
A. Debt Financing
lending institutions (loans)
selling bonds
B. Equity Financing
Retained Earnings
Venture Capital
Selling Stock

+Source of Equity Financing




Equity Financing

Internal Sources



Retained earnings




Owner Contributions













+Selling stock as Equity Financing
IPO (Initial Public Offering (First time selling)
Stock Certificate
Dividends
Common Shares
Preferred Shares

External Sources
Sale of Partner ship
Venture Capital

Public Sale of stock


+ Preferred Shares

-Convertible: Shares can be exchanged after a stated number of years for
common shares at a preset rate, option of the shareholder

-Cumulative : Dividend not paid in full in any yea balance carried forward -
cumulative unpaid balance must be paid before any

dividends are paid to
common shareholders

-Callable: Company has right after a number of years to call them back by
repaying shareholders their original investment

-Redeemable: After stated number of years, investors can return stocks and
ask for repayment of his + her investment

+Canadian Financial Services Industry
Financial service industry is important in Canada b/c it is responsible for:
banking -Finance
Investing - Money
Insurance -Financial Planning
60,000 direct jobs
payroll of 35Billion
6%of GDP
13 billion in taxes
recognized as on the safest and healthiest economies in the world

+Participants in the financial Service industry
Traditional banks
Credit unions
Caisses populaires
trust companies
non banks; pensions funds, insurance companies and brokerage houses

+Regulation of the Canadian Financial Service Industry
There is no single body
responsibility is shared provincially and federally
federally:
office of superintendent of financial institutions
Canada Deposit insurance Cooperation
Financial Consumer Agency of Canada

+Money Supply: M2
42 % in savings accounts and money market
M1, 58% currency in circulation and checking accounts

+ Why is money supply controlled?
consider law of Supply and Demand
High Supply of money will drive up prices
low supply go money will reduce prices


+Bank of Canada
Monitors the money supply
Regulates short-term interest rates
sets target overnight rates

+Services provided by banks
Checking and savings accounts
loans and mortgages
registered retirement accounts
Financial counselling

+Insurance Industry

-Sharing of risk
Premium = probability of loss * average loss + profits

+Canadian Securities Industry
Security dealer
prospectus
securities commission
Stock Exchange
primary markets - selling of stocks 1st time
secondary markets - selling stocks over and over again

+Choosing right investment strategy
Investment risk
Yield
Duration
Liquidity
Tax consequences

+Investing in bonds
coupon/interest rate
domination/face value
maturity date
types
unsecured/debenture
secured
mortgage

+Mutual Funds
Advantages
diversification - reduce risk
expert management
choice of fund types
ability to balance w debt

Disadvantages
Long term commitment
inability to pick individual stocks
management fees

[Video] McFarlane Toys
Why did McFarlane try to avoid getting other investors involved in
his business? What is the advantage, in this instant, of debt financing?
more ownership = more control over business decisions
debt financing allows him to retain control as creditors do not
typically have voting rights on company decisions
too much input can interfere with the creative process
freedom for when he spends his own money
freedom when he spends others Money

Next Lecture: IT systems

Security issues - Whn point of access to computer networks multiply
Threats from
computer viruses
hackers work to gain
info they are not
authorized to


+New Issues IT Managers are confronted with
Privacy issues - an issue usually linked to security
how to keep private information (Regarding customers,
business plans, financial data) safe and confidential in an
environment where fast access is key to business success

History of the Internet
Risk that Soviets would attack US phone lines, so needed other
communication methods
Email introduced in 1985 by America Onlines

+internet, eCommerce, eBusiness
Original rules of the internet prohibited commercial use
Publishing vast unto date catalogue information

[Video CaseStudy] Telecommuting
Examining work experiences of teleworkers (remote workers) vs. Office Workers

-Teleworkers, less stress

-new Ideas - idea of paradox

Next Lecture: Guest Lecturer (Cocacola)


Production and Operations Management

Supply Chain Overview


transition from functional Orientation to E2E Excellence (End to End)

The New Supply Chain Leader
Good Business leaders, not just manufacturing or supply chain leaders- have
to orchestra the end to end supply chain
Youre also responsible for great business performance
Key abilities
strategic understanding of business
understanding of competitive environment
operational excellence
organizational leader
Key attributes of an Excellent Supply Chain
End to end focus and scope
Alignment of supply chain strategy with corporate goals and
business strategy
Segmented operating models to compete effectively in local
markets
Synergy & integration with customers and suppliers as well as
within companys functions
High Value collaborative supply networks with supply chain
partners
Demand Driven network for market responsiveness

Demand driven SC Planning
-
Forcast- Driven Planning


-Predicitive- use formulas and history to forecast future demand
uses buffers to absorb demand shocks
Expensice use of working capital

Demand- Driven Planning
Demand Sensing: Uses deman signals to plan and manage supply
Deman Shaping: uses strategies and information to shape
demand
Demand Response: fulfilment based on customer
requirements

beer company- Colerado (youtube) search it.

+Production and Operations Management theory;

Production: The use of resources, such as workers and machinery, to convert
materials into finished goods and services


Production and operations management : The process of overseeing the
production process by managing the people and machinery that convert
materials and resources into finished goods + services

+Planning the production Process

Choose what good or services to offer customers

Convert original product ideas to final specifications

Design the most efficient facilities to produce those products

In a traditional manufacturing organization, each production manager has a
specific
area of authority and responsibility

Organization are moving towards team-oriented structures, where team
members are assigned to specific projects, with all members reporting to the
production manager

+Carrying out the Production Plan
-Make, buy, or lease decision: Choosing whether to manufacture part in-house, buy
it from an outside supplier, or lease it

-Factors in the decision include cost, availability of reliable outside suppliers,
duration of the firms supply needs, and the need for confidentiality

-Selection of suppliers

-Based on comparison of quality, prices, dependability of delivery and
services offered by competing companies

+Controlling the production process
creating well-defined procedures for coordinating people, materials, and
machinery to provide greatest production efficiency

+Demand, Operations & Inventory Planning (DOIP)

Sales Planning - Monthly in weekly buckets, target volumes, pricing + mix
Demand Planning - Forecast quantities by delivering to warehouses
S+ OP - monthly consensus, sales. demand + supply
S +OE (execution) - weekly changes to meet the monthly plan
Inventory planning - determine the right inventories in the right place at the
right time
operations planning- planning and scheduling process rough out production
planning, detailed production scheduling materials planning, deployment
planning

+Inventory management
-
Inventory by definition is waste, something sitting around waiting to be
used.

takes up space, space = $$

+Why hold inventory?

-Time varying demand or supply patterns (seasonal)
-To balance against uncertainty (safety)

-customer demand

-supplier quantities, costs, or lead-time
-Processing and movement (pipeline)

delivery lead-times
-Economies of scale in transportation, production, or purchasing (batch)
-To ensure a high level of customer service (location)
-Speculation on future events, including price increases (speculative)

+ How much is enough?

-required safety stock grows rapidly with an increase in the desired product
availability
To improve system performance [ lead time +uncertainty / inventory]

To improve system performance:
Reduce material lead times
reduce information delay times
improve quality of information


Major learning points

-Effective inventory management involves balancing key trade-offs


-order frequency and size of order


-inventory cost and customer service


-Large number of SKUs or locations

-Reduction of safety stocks (without) changes in service level can be achieved
by reducing lead time or variability

-Good inventory policies require good information, so process must be in
place to ensure accuracy

+Equipment Efficiency and Effectiveness
OEE: Overall Equipement Effectiveness

overall equipmetn effectivness (OEE) is a popular measure of manufacturing
performance

OEE= Availablitiy x performance x quality

*If you cannot measure it you cannot control

measure business performance everyday


customer, financial, learning growth, and internal busiensss
performance

+Final Thoughts on operations leadership


tp be a supply chain leader, you need to develop a holistic end-to-end
understanding of the supply chain

-to have a successful supply chain, its important to identify the right supply
chain for your specific environment
The right supply chain needs to be reman-driven, segmented, aligned.

Next Lecture: Guest Lecturer (Lawyer)

Business and Law

+three branches of government
1. legislative branch- creation of laws
2. executive branch- enforcement of law
3. judicial- interpretation + application of laws

+How laws are passed in Canada
Bill origination
public bulls- affect the public
private bills- individual/groups (eg. smoking laws only affect
smokers)
Cabinet review
Parliamentary Review
First Reading- Bill is printed
second reading - members debate
third reading - voting w amendments
Royal Assent
Becomes Law
Inforce date
A bill (or statue) is in forced

The application of the law in Canaada

Consumer Protection law
Primarely derived from the Consumer Protection Acts (CPA)
(Provincially);
Most publicizes area of the law
includes product liability
used to be really one sided, it was shame, the
idea it was there for everyone else but standard
to sue someone was very difficult, had to prove
that X company knew there was a defect
Strict liability, if there was a defect the
company must have known
flipped the blame back to
the manufacturer himself

product liability rules are not all consumer

friendly, consumer must prove that there is a
Casusal connection between their loss or harm
and the defect

Warranties
Warranties can be expressed or implied
express warranty: seller guarantees a certain quality
Competition and Fair Dealing
aplies to both business to business interactions and to individual
challenges of a business practise

Real property law

not covered by the materials but its very relevant in terms of business

-Personal Property

is any property that is not real property

-all personal property can be leveraged and securitized. when this done, the
result is the formation of a PPSA security interest

Intellectual Property
fastest growing area of law, one that has global implications
When we think IP what do we think of?
Copy written work/texts cant be plagiarize
However, IP law covers other areas categorized under three subareas
copyright law:
rights in the work
what constitutes infringements
moral rights (re:Eaton Centre Eagles)
Exemptions (Re: The home movie theatre)
Patent Law
Exclusive right to make use and sell innovation
Trademark Law: Passing off
Corporate Branding
Canadian Intellectual Property Office
Patent Law: inventions, medications, anything that has engineering
and manufacturing behind it

NEXT Set of Lectures: International Business


International business

-eg. Ipod & Globalization

-when an iPod is imported from china to US, American records its estimated
factory value as 150$ as an import from
china

-150$ is added to the US trade deficit

-Trade today is less and less about importing maple syrup and fruits, and more
about complex, global products like iPods and iPhones

+Globalization -> Globalization is the increase interdependence, integration,
and interaction among people and corporations in disparate locations around
the world. Refers to a complex of economic, trade, social, technological,
cultural, and political interrelationships.

A global company is one that has customers in all the major regions
(Americas, Europe, and Asia)
Not a global firm unless You produce locally what you sell

+Why do Nations trade?
To obtain goods they need + want and cannot produce themselves
trade with Asia for silk, tea
Marco Polo and silk trade from China to Europe
To obtain gold/ Hard Currencies by running trade surplus
Some Countries have natural absolute advantage. e.g. -> Canada and maple
syrup
Some nations have a comparative advantage over another -> the ability to
produce a product more efficiently than another country
Less developed nations have a comparative advantage in labour of
goods because of low cost of labour

+It is easier and less risky to do business domestically than internationally
more risk involved with international business
exchange rate may be more volatile
Therefore companies should trade only when they think there is an
advantage in trading

FreeTrade
Why does free trade matter?
lower prices + greater choice
more jobs + faster economic growth
prevents economics distortions of trade barriers

+NEGATIVE RAMIFICATIONS OF GLOBALISATION

The challenges of Cultural diversity,
-cultural misunderstandings are not inevitable
Just as culture is learned & adapted by children as they grow anyone can be
educated about a culture they will be working in or with - becomes part of
the global managers toolkit
Eg. yellow/white flowers in chinese cultures symbolize
death

+Ethical Issues

Different Labour laws in different countries

corruption
environmental standards
Benefits of corporate social responsibility
reputation in home country
Companies are doing good
eg. wages above local markets
community development
positive stakeholder relationships

+Why is Canada so internationally Oriented?

-rich natural resource endowments

-forced to look beyond domestic markets for growth opportunities

How does Canada fit into the international business?

Canada has been forced to look beyond domestic markets for growth

[Video Case Study] Age Compression and Children
-
Whats going on with kids these days?

children have become target for sexual clothing
Age compression - stratgey to sex up clothes
Children (girls) are exposed to over 280 sexy images in one day
its an industry that makes 1.7 billion dollars annually

Next set of lectures : Business and the environment:

[ Video Case Stduy] : the eleventh hour video:

The earth was created 15 min before december 31st

Humans are recognized as the third chimpanzee


have the ability to make tools and communicate




to have very detailed conversation

human mind key to very survival

only animal on planet to know we can affect the future and choose
accordingly to survive

have the fundamental misunderstanding that we are separated from nature

culture built on illusion that we are superior to nature

live in a human created environment

great rupture came in 1800 - 19th century, industrial revolution

exponential growth of population due to ancient sunlight stored in the earth

planet naturally could not sustain more than a billion people

corner stones of systems are resting on non renueble fossil fuels

oil is the basis is what we sustain complecxtiy

speed of natural changes are dwarfed by human natural changes

 The earth is warmed up by 7/10 degree of a semi grade

Corporate economics globalization is one of the main concerns
Impact of global warming on business
- hurricane sandy aka frankenstorm most severe strom to hit NYC
- cost of storm to exceed 1 billion dollars

Lecture:
Why are co2 Emissions rising
-principle factors have been :
1. rising populations
2. growing energy use per capita
-per capita use of energy consumption in US. Canada , Europe, Japan is still much
higher than emerging markets
-alternative power sources
-wind and solar power generally understood to be potential partial alternatives
to carbon based fuel

+Industries that will suffer the most:
- oil and has industry suffer most
Airline - rising cost of fuel makes air travel less affordable
Tourism- cos of travel will rise , rising sea levels will shrink beaches
Insurance and financial services - more accidents, damages increase and so do
claims
Agriculture- lack of precipitation , loss of agricultural land in coastal areas and
larger desserts

Business will also need strategies to cope with mounting public concerns
about practises linked to global warming

+Companies that will benefit
-
Producers of energy efficient appliances
-Demand for desalination plants will rise because of fresh water shortages
-Industries that are not sensitive to price inflation, that investors seek during
uncertainty (gold producers)

+What are the implications?
Consumers need to think beyond the surface issues when making purchasing
Managers need to know how they produces

Next Set of lecturers: Business and Government

Buisness and Government

Government roles in the economy

government involved in fiscal and monetary policies the goals which

are to balance:

inflation

unemplyment


many powers of differenet levels of government divided under constitution
federal government- defines and forgone poliy, regional redistribution
provincial governments- post secondary education
certain shared levels of government
-policing ( OPP, regional, and RCMP)

all governments must buy goods and services from the private sector in order to
carry out their responsibilities
-Many businesses depend on governments as customers

a caterer in Ottawa supplying lunches for govt meetings

Markers of speciality equipment- TTC subway cars, RCMP uniforms

+government is also involved in regulation

-protection of consumers- setting and revising rules, conducting
investigations and enforcement


-food and drug act - inspection of meat packing plants


-regulation hazardous products - bans and appropriate labelling


-specially regulated industries


-Protecting competition


-competition act makes it illegal for businesses to act to reduce
competition

-Protecting the Environment


-challenge of balancing industry with the environment


-typically popular with the public

Government provides essential services to businesses


infrastructure provided by government


roads, post office, fire fighting services, utility, business loan programs


government services are important parts of creating a healthy
relationship

+Buisness-Government relations



-businesses have a legitimate reasons to want their interests,

-businesses say they want less red tape but governments need to ensure
public interests are protected

Economic crises of 2008-09 = unprecedented involvement by governments in the
private sector

banks have received massive loans and investments by governments


proposing largest US banks be nationalized - or owned and operated by the
federal government - temporarily until stabilized

[Video care study]: Red Bull


red bull flagged in Europe


developed in Austria


80 mg of caffeine, and 1000 mg of Taurine


Canadian government made new regulation on natural health
products


countries like Norway, Denmark and franc banned the sale of red bull


Sweden and Iceland have concern , about energy drink being used
after sports





[Video case study]: Walmart video



-walmart broadest and most powerful company in US history


trackign nations growing trade defecit




-first company to report one quarter of a trillion dollars in sales

-worlds largest company


-has tremendous power and influence

-Walmart setting new standards for the nation

-global retailers have become most powerful companies in global economy
Arkansas:


strive in everything they do to keep costs as low and possible for
costumers


-make profit on high volume and low turnover

-power of information hidden in barcode
-as an efficacy machine has done better than any other us company in history

generated a revaluation on how goods are produced
-In the business world Walmart calls the shots,

Push comes to shove they bully,
when rubbermaid closed, corporate values were lost as well

-Although the opening price of an item my the lowest price and beat the
competition, but the rest of the items wont be cheaper than the competition

-stock prices declining so they started importing cheap goods, margins coming in
were at 60-80%
-wlamart made much bigger profit on third world products
-wlamart dependent on asian products
-35 supercentres in china,
-80% of walmart suppliers come from china