Business Midterm Exam Review
Chapter 12
I.
Chapter Review
a. What is marketing and how does it facilitate exchanges?
i. Marketing is a group of activities designed to expedite
transactions by creating, distributing, pricing, and promoting
goods, services, and ideas
ii. Facilitates exchanges through the marketing concept and by
selling
b. Functions of Marketing
i. Buying- a marketer must understand buyers’ needs and
desires to determine what products to make available
ii. Selling- marketers view selling as a persuasive activity that is
accomplished through promotion (advertising, personal
selling, sales promotion, publicity, and packaging)
iii. Transporting- marketers focus on transportation costs and
services
iv. Storing- sellers must arrange for adequate storing of the goods
to maintain a steady supply all of the time
v. Grading- refers to standardizing products by dividing them
into subgroups and displaying and labeling them so that
consumers clearly understand their nature and quality
vi. Financing- the marketing arranges credit to expedite the
purchase
vii. Marketing research- through research, marketers ascertain the
need for new goods and services ~ by gathering info regularly,
marketers can detect new trends and changes in consumer
tastes
viii. Risk-taking- the implication of risk is that most marketing
decisions result in either success or failure
c. The Marketing Concept
i. The idea that an organization should try to satisfy customers’
needs through coordinated activities that also allow it to
achieve its own goals
ii. Important because the only way to achieve customer
satisfaction is by knowing what the customer wants and selling
it to them
d. Marketing Strategy
i. A plan of action for developing, pricing, distributing, and
promoting products that meet the needs of specific customers
ii. 2 components
1. Selecting a target market
2. Developing an appropriate marketing mix to satisfy that
target market
e. Market Segmentation
i. A strategy whereby a firm divides the total market into groups
of people who have relatively similar product needs
ii. 3 target marketing strategies
1. Concentration approach- a company develops one
marketing strategy for a single market segment
2. Multi-segment approach- the marketer aims its efforts
at two or more segments, developing a marketing
strategy for each
3. Niche marketing- narrow; efforts are on one, small,
well-defined group that has a unique, specific set of
needs
f. Variables in Marketing Mix
i. Product- used in marketing strategy b/c it is the central focus
and the other variables get planned around the product
ii. Price- relates directly to the generation of revenue and profits
and prices can be changed to stimulate demand or respond to
competitors’ actions
iii. Distribution- making products available to customers in the
quantities desired- wholesalers and retailers perform
transporting, warehousing, material handling, and inventory
control to movie products efficiently from producers to
consumers or industrial buyers
iv. Promotion- when marketers use advertising, and other forms
of promotion, they must effectively manage their promotional
resources and understand product and target market
characteristics to ensure that these promotional activities
contribute to the firm’s objectives
g. Importance of Marketing Research and Information Systems
i. It’s a framework for accessing information about customers
from sources both inside and outside the organization
1. Inside- there is a continuous flow of information about
prices, sales, and expenses
2. Outside- data are readily available through private or
public reports and census statistics and from many
other sources
3. This is important to planning and marketing strategy
development
h. Factors that Influence Buying Behavior
i. Important because marketers need to understand the
customer and their wants and needs in order to satisfy them
ii. Psychological Variables:
1. Perception- process by which a person selects,
organizes, and interprets information received by his or
her senses
2. Motivation- inner drive that directs a person’s behavior
towards goals
II.
3. Learning- changes in a person’s behavior based on
information and experience
4. Attitude- knowledge and positive or negative feelings
about something
5. Personality – the organization of an individual’s
distinguishing character traits, attitudes, or habits
iii. Social Variables:
1. Reference groups- groups with whom buyers identify
and whose values or attitudes they adopt
2. Social classes- a ranking of people into higher or lower
positions of respect
3. Culture- the integrated, accepted pattern of human
behavior, including thought, speech, beliefs, actions, and
artifacts
iv. External Forces on the Market:
1. Technological- computers and other technological
advances that improve distribution, promotion, and
new-product development
2. Political, Legal, Regulatory- laws and regulators’
interpretation of laws; law enforcement, political
actions of interest groups (ex: law says advertisements
must be truthful and all health claims must be
documented)
3. Social- the public’s opinion and attitudes toward issues
such as living standards, ethics, the environment,
lifestyles, and quality of life (ex: social concerns led
marketers to design and market safer toys for children)
4. Competitive and Economic- competitive relationships,
unemployment, purchasing power, and general
economic conditions (ex: prosperity, recession,
depression, recovery, product shortages, and inflation)
Class Notes
a. Price – Cost = Profit
b. The 3 Strategies in Marketing
i. Focus
1. Focus on one segment of market (Lutherans,
southerners, lefties)
2. Small firms can be big in a limited segment
ii. Differentiation
1. Has a special feature (speed, quality, styling, etc.)
2. Customer is willing to pay for the better product
because it’s getting more for its money
3. Price-cost= profit
a. Higher price, higher profit
iii. Cost leadership
1. Wal-Mart
2. Rayonier
3. Price-Cost=Profit
a. Lower cost, higher profit
c. Levels of Strategy
i. Functional- Marshall the functional resources (crossfunctional)
1. Many kinds of customers = complex
2. We want to know the customer, thus we gather the
resources
3. Deals with customers
ii. Business- domain navigation
1. How you gain competitive advantage in the productmarks
a. Ford vs. Chevrolet
b. Pepsi vs. Coke
2. Deals with competitors
iii. Corporate- the domain selection- what businesses will we be in
1. If the answer is plural, we want synergy
a. Synergy- 2+2=5
i. The whole is worth more than the sum of
its parts
2. The most difficult
3. Deals with its own purpose and plans
d. ***Customers don’t want a drill, they want a HOLE
COCA COLA
PEPSICO
Soda
Soda
Juice (Minutemaid)
Juice (Tropicana)
Water (Dasani)
Water (Aquafina)
COKE KNOWS LIQUIDS
Snacks
Frito-Lay
Fritos, cheetos, Doritos, Tostitos, lays,
ruffles
Quaker Oats
e. Coke & Pepsi- baby the soda- only the company and customers can
touch it, but not the store workers
i. Coke: KNOWS LIQUIDS
ii. Pepsi: the food and snacks fit together- when you want to eat,
you want to drink- one for each hand
f. By doing many things at one, we learn more and see how they fit
together
i. Marketing is about relationships- Pepsi and Coke have
different formulas for synergy, but both are successful
g. Word of Mouth- the new way to advertise
h. Plane Ticket- More than the ride (the bathroom, luggage, service, etc)
i.
9 Key Ideas of Differentiation – they offer customers something they
value that competitors don’t have (and are willing to pay to have)
i. Multi-functional (cross-functional) team- you and your
customer understand each other
1. * (Q’s 2-9 from Harvard Business Review)
ii. How do people become aware of need?
1. Good idea/bad idea (GOOD IDEA)
2. Oral B (Wharton checked into it) with patented dye- not
unnecessary because people are busy, so the brush
gives customers guidance
iii. How do customers find you?
1. Bricks, clicks, online and in-stores
2. Wal-Mart
a. Computer- buy online because new, pristine, less
tampered with
b. Shampoo- buy in-store because no shipping
iv. How do customers re-purchase?
1. American Hospital Supply- bandages, tongue sticks,
needles, cotton balls
2. Cheap, yet important because it can stop the operations
of hospitals- cannot afford to run out of them
v. What happens when product or service is delivered?
1. Progressive Insurance- cheaper than other insurers that
are full-line
a. They are there when you need it- customer
satisfaction- available 24/7
vi. How is product installed?
1. Disk Error 23:
a. HP Compaq is user-friendly with installed DVD,
24 hour hotlines, but maybe pride won’t let me
call, so the DVD helps them by themselves and
saves from embarrassment
vii. How is product paid for?
1. MBNA credit card- invoice, now easier to decipher
viii. How is product transported?
1. Pepsi- first places 2-liter bottle
a. Pepsi when to 2 liter bottle first
2. Coke did it second, but the bottle was hour-glass shape,
making it easier to hold
a. Still, Coke was left behind
ix. How to help customers use the product?
1. Butterball- website and 24-hour hotline
a. Very good hot-line- they stand out because they
LISTEN (lost art)
i. They don’t just give answers, they care
and want to hear you
Chapter 13
I.
Chapter Review
a. Steps Companies take to Develop and Introduce a New Product
i. Idea development- new ideas come from marketing research,
engineers, and outside sources such as advertising agencies
and management consultants
ii. New idea screening- marketing manager looks at
organization’s resources and objectives and assesses the firm’s
ability to produce and market the product
1. Important aspects to be considered: consumer desires,
competition, technological changes, social trends, and
political, economic, and environmental considerations
2. 2 reasons new products succeed
a. Able to meet a need or solve a problem better
than products already available
b. They add variety to the product selection
currently on the market
iii. Business analysis- basic assessment of a product’s
compatibility in the marketplace and its potential profitability
1. Size of market and competing products are studied
2. Most important relates to market demand- how the
product will affect the firm’s sales, costs, and profits
iv. Product development- product is developed into a prototype
that should reveal the intangible attributes it possesses as
perceived by the consumer
1. Various elements of the marketing mix must be
developed for testing
v. Test marketing- trial mini-launch of a product in limited areas
that represent the potential market
1. Allows a complete test of the marketing strategy in a
natural environment, giving the organization an
opportunity to discover weaknesses and eliminate them
before the product is fully launched
vi. Commercialization- the full introduction of a complete
marketing strategy and the launch of the product for
commercial success
1. The firm will gear up for full-scale production,
distribution, and promotion
b. Product Life Cycle
i. The stage a product is in helps determine market strategy
ii. 4 stages
1. Introduction- consumer awareness and acceptance of
the product are limited, sales are zero, and profits are
negative (negative because firm has spent money on
research, development, and marketing to launch the
product)
c.
d.
e.
f.
a. Marketers focus on making consumers aware of
the product and its benefits
2. Growth- sales increase rapidly and profits peak, then
start to decline (decline because new companies enter
the market, driving prices down and increasing market
expenses)
a. Firm tries to strengthen its position in the
market by emphasizing the product’s benefits
and identifying market segments that want these
benefits
3. Maturity- sales continue to increase in the beginning,
but then they curve peaks and start to decline, while
profits continue to decline
a. Characterized by severe competition and heavy
expenditures
4. Decline- sales continue to fall rapidly, profits decline
and may even become losses as prices are cut and
necessary marketing expenditures are made
a. Firms may eliminate certain models or items
b. To reduce expenses and squeeze out any
remaining profits, marketing expenditures may
be cut back, even though such cutbacks
accelerate the sales decline
c. Plans must be made for phasing out the product
and introducing new ones to take its place
The Most Flexible Marketing Mix Variable
i. Price- because it may be set and changed in a few minutes
2 Ways to Set a Base Price for a New Product
i. Price skimming- charging the highest possible price that
buyers who want the product will pay
1. Allows the company to generate much-needed revenue
to help offset the costs of research and development
ii. Penetration price- a low price designed to help a product enter
the market and gain market share rapidly
1. Less flexible because it is more difficult to raise the
penetration price (easier to just lower the skimming
price)
2. Used most often when marketers suspect that
competitors will enter the market shortly after the
product has been introduced
The Lease Flexible Marketing Mix Variable
i. Distribution because distribution decisions often commit
resources and establish contractual relationships that are
difficult, if not impossible, to change
Typical Marketing Channels for Consumer Products
i. Marketing channel- group of organizations that moves
products from their producer to customers; also called a
channel of distribution (makes products available to buyers
when and where they desire to purchase them)
ii. 4 types
1. Producer  Consumer (ex: farmers who sell veggies to
consumers at roadside stands)
2. Producer Retailers (middlemen)Consumer (ex:
college textbooks, automobiles, and appliances)
3. Producer Wholesalers (middlemen)Retailers
(middlemen)Consumer (ex: refrigerators, TVs, soft
drinks, cigarettes, clocks, watches, and office products)
4. ProducerAgents (middlemen)Wholesalers
(middlemen)Retailers (middlemen)Consumer (ex:
convenience products: candy and some produce)
g. Activities Involved in Physical Distribution
i. Physical distribution- involves all the activities necessary to
move products from producers to consumers (inventory
control, transportation, warehousing, and materials handling)
1. Creates time and place utility by making products
available when they are wanted, with adequate service
and at minimum cost
2. Both goods and services require this
3. Part of supply chain management
ii. 3 activities
1. Transportation- shipment of products to buyers
a. Creates time and place utility for products (key
element in the flow of goods and services from
producer to consumer)
b. 5 modes of transportation- railways, motor
vehicles, inland waterways, pipelines, and
airways
i. Railroads- least expensive
ii. Trucks- are more flexible because they
can reach more locations, handle freight
quickly and economically, offer door-todoor service, and are more flexible in
packaging requirement
iii. Airways- offer speed and high degree of
dependability but is most expensive
(although the shipping is least expensive,
but slowest form)
iv. Pipelines- used to transport petroleum,
natural gas, semi-liquid coal, woodchips,
and certain chemicals
c. Many products can be moved most efficiently by
using more than one mode of transportation
d. Factors affecting the mode of transportation
selected include: cost, capability to handle the
product, reliability, and availability
e. Mode is selected by unique characteristics of the
product and consumer desires
2. Warehousing- the design and operation of facilities to
receive, store, and ship products
a. Receives, identifies, sorts, and dispatches goods
to storage where they store them, recalls,
selects/picks goods, assembles the shipment,
and then dispatches the shipment
b. Important because it makes products available
for shipment to match demand at different
geographic locations
3. Materials Handling- the physical handling and
movement of products in warehousing and
transportation
a. Handing processes may vary significantly due to
product characteristics
b. Efficient materials-handling procedures
i. Increase warehouse’s useful capacity
ii. Improve customer service
iii. Well-coordinated loading and movement
systems increase efficiency and reduce
costs
h. Publicity and Advertising
i. Similar
1. Both carried by mass media
ii. Different
1. Advertising messages tend to informative, persuasive,
or both, while publicity is mainly informative
2. Advertising is often designed to have an immediate
impact or to provide specific information to persuade a
person to act, while publicity describes what a firm is
doing, what products it is launching, or other
newsworthy information, but seldom calls for action
3. For advertising, the organization must pay for media
time and select the media that will best reach target
audiences, while for publicity, the mass medial willingly
posts it because it has a general public interest
4. Advertisements are repeated, publicity is not repeated
i. The 6 Step Personal Selling Process
i. Prospecting- identifying potential buyers of the product
j.
ii. Approaching- using a referral or calling on a customer without
prior notice to determine interest in the product
iii. Presenting- getting the prospect’s attention with a product
demonstration
iv. Handling objections- countering reasons for not buying the
product
v. Closing- asking the prospect to buy the product
vi. Following up- checking customer satisfaction with the
purchased product
Push Strategy vs. Pull Strategy (or Both)
i. Push strategy- attempt to motivate intermediaries to push the
product down to their customers
1. To motivate wholesalers and retailers to make the
product available to their customers
2. Sales personnel may be used to persuade
intermediaries to offer the product, distribute
promotional materials, and offer special promotional
incentives for those who agree to carry the product
3. Example: Chrysler
4. Personal selling to marketing channel indicates the
push strategy
ii. Pull Strategy- the use of promotion to create consumer
demand for a product so that consumers exert pressure on
marketing channel members to make it available
1. Example: Coca-Cola’s VAULT energy drink
2. The exclusive use of advertising indicates the pull
strategy
Chapter 14
I.
Class Notes
Balance Sheet Income
Statement
Retained
Expenses
earnings
Accrued
General and
expenses
administrative
expenses
Common stock
Propriety plan
and equipment
Current assets
Goodwill
Statement of
Cash Flow
Investing
activities
Profitability
Rations
ROI
Return on
equity
II.
Asset
Utilization
Ratios
Liquidity
Debt
Utilization
Ratio
Per Share
Measures
Quick ratios
Asset test
Current ratio
a. Three companies that are no longer in Dow Jones Industrial Average
i. General Motors
ii. Citigroup
iii. AIG
b. Three companies that joined Dow Jones Industrial Average
i. Kraft
ii. Sysco
iii. Red Umbrella Travelers
Chapter Review
a. Not all financial statements follow precisely the same format
i. Different organizations generate income in different ways
which suggests that one size does not fit all
b. Accounts that Appear under Current Liabilities
i. Balance Sheet
c. Income Statement and Balance Sheet answer 2 Questions
i. How much did the firm make or lose?
ii. How much is the firm presently worth passed on historical
values found on the balance sheet?
d. 5 Basic Ratio Classifications
i. Profitability ratio- measures the amount of operating income
or net income an organization is able to generate relative to its
assets, owners’ equity, and sales
ii. Asset utilization ratio- measures how well a firm uses its assets
to generate each $1 of sales
iii. Liquidity ratio- measures the speed with which a company can
turn its assets into cash to meet short-term debt
iv. Debt utilization ratio- measures how much debt an
organization is using relative to other sources of capital, such
as owners’ equity
v. Per share data ratio- data used by investors to compare the
performance of one company with another on an equal, per
share basis
e. Debt Ratios Important in Assessing the Risk of the Firm
i. The use of debt carries and interest chare that must be paid
regularly regardless of profitability, thus debt financing is
much riskier than equity
ii. There are unforeseen negative events such as recessions,
which affect heavily indebted firms to a far greater extent than
those financed exclusively with owners’ equity
iii. There are also other factors that contribute to the risk, so
managers of most firms tent to keep debt-to-asset levels below
50%
Chapter 16
I.
Class Notes
a. John Chambers- Cisco CEO
b. Bonds are safer than stock because you don’t lose money, but you still
must be wary about where you put it- only but it in companies that
you deem successful
c. Red Flags in Financial Statements
i. Recording premature or questionable revenues
1. Unshipped items
2. Sales to affiliate
ii. Shifting current expenses to past periods or future periods
iii. Aggressive Accounting
1. Recording investment income as revenue
2. Extensive use of off-balance-sheet financing, such as
joint ventures
3. Borderline (too much of this is bad)
iv. Conservative Accounting Policies
1. Too perfect to be true
2. Warning flag
v. Boss Never Takes a Vacation
1. Can’t risk the discovery of accounting shenanigans
2. They have something to hide
d. How to Smell a Rat
i. Advisor has custody of your assets
1. Bad because advisor won’t need you anymore and
might take advantage of you
2. We do our own job- take care of yourself
ii. Returns are consistently great
1. Too good to be true
iii. The investment strategy is not understandable
1. Too murky, flashy, or complicated
2. Find out what is going on
3. If agent is not explaining, then get a new agent
iv. Promoted benefits have no impact on results (misleading)
1. Exclusivity- tries to make it sound difficult to get in
2. “Need to know somebody”
v. A trusted advisor did due diligence (investigation)
1. You didn’t do your own diligence
2. Don’t trust your advisor to investigate
3. Do it yourself
II.
Chapter Review
a. Working Capital Management
i. Capital management- the managing of short-term assets and
liabilities
ii. Called this because short-term assets and liabilities continually
flow through an organization and are this said to be working
b. How a Company Should Speed Up Cash Flow
i. Cash flow- the movement of money through an organization on
a daily, weekly, monthly, or yearly basis
ii. Lockbox- an address, usually a commercial bank, at which a
company receives payments in order t speed collections from
customers
iii. Larger firms may use electronic funds to speed up cash flow
(the speed of collections and disbursements increase to one
day)
iv. They should increase cash flow to ensure they have enough
money on hand to pay for normal daily expenses, such as
employee wages and bills for supplies and utilities (called
transaction balances) or to put the extra money in marketable
securities and invest it up to 1 year or until needed
c. Various Types of Marketable Securities
i. Marketable securities- temporary investment of “extra” cash
by organizations for up to one year in U.S. Treasury bills,
certificates of deposit, commercial paper, or Eurodollar loans
1. Treasury bills- short-term debt obligations the U.S.
government sells to raise money
a. Issued weekly
b. Risk free because government will not default on
its debt (the safest)
2. Commercial Certificates of Deposit (CDs)- issues by
commercial banks and brokerage companies, available
in minimum amounts of $100,000 which may be traded
prior to maturity
a. Typically in units of $1 million for large
corporations investing excess cash
3. Commercial Paper- a written promise from one
company to another to pay a specific amount of money
a. Is only backed by the name and reputation of the
issuing company, thus sales of commercial paper
are restricted to only the largest and most
financially stable companies
b. As commercial paper is frequently bought and
sold for durations of as short as one business
day, many “players” in the market find
themselves buying commercial paper with
excess cash on one day and selling it to gain extra
money the following day
4. Eurodollar Market- a market centered in London for
trading U.S. dollars in foreign countries
a. Originally developed in London, thus any dollardenominated deposit in a non-U.S. bank is called
a Eurodollar deposit, regardless of whether the
issuing bank is actually located in Europe, South
Africa, or anyplace else
b. The U.S. dollar is accepted by most countries for
international trade, this these dollar deposits can
be used by international companies to settle
their accounts
c. The market created for trading such investments
offers firms with extra dollars a change to ear a
slightly higher rate of return with just a little
more risk than they would face by investing in
U.S. Treasury Bills (2nd best option in terms of
safety)
d. Line of Credit at a Bank
i. Line of credit- an arrangement by which a bank agrees to lend
a specified amount of money to an organization upon request
provided the bank has the required funds to the loan
1. Similar to credit card except that there is a preset credit
limit
e. Fixed Assets
i. Aka long-term assets- production facilities (plants), offices, and
equipment- all of which are expected to last for many years
ii. Capital budgeting- the process of analyzing the needs of the
business and selecting the assets that will maximize its value
1. Assessing risk is capital budgeting is important
a. When considering investments overseas, risk
assessments must include the political climate
and economic stability of a region
b. The longer a project or asset is expected to last,
the greater its potential risk because it is hard to
predict whether a piece of equipment will wear
out or become obsolete in 5 or 10 years
c. The level of a project’s risk is also affected by the
stability and competitive nature of the
marketplace and the world economy as a whole
f. A Company Finances Fixed Assets by:
i. Raising low-cost long-term funds to finance them by 2 ways
1. Attracting new owners (equity financing)
a. Owners’ equity refers to the owners’ investment
in an organization
b. Equity includes the money and assets that
proprietors and partners have brought into their
ventures
2. Taking on long-term liabilities
a. Long-term liabilities- debts that will be repaid
over a number of years, such as long-term loans
and bond issues
b. Key word is debt
i. Many corporations acquire debt by
borrowing money from pension funds,
mutual funds, or life-insurance funds
g. Bonds
i. Bonds- debt instruments that larger companies sell to raise
long-term funds
1. Buyers of bonds (bondholders) loan the issuer of the
bonds cash in exchange for regular interest payments
until the loan is repaid on or before the specified
maturity date
2. The bond is like an IOU the represents the company’s
debt to the bondholder
3. Indenture- the bond contract that specifies the basic
terms of the bond, such as its face value, maturity date,
and then annual interest rate
4. Can be paid in one lump
ii. Types of Bonds
1. Unsecured bonds- debentures, or bonds that are not
backed by specific collateral
2. Secured bonds- bonds that are backed by specific
collateral that must be forfeited in the event that the
issuing firm defaults
3. Serial bonds- a sequence of small bond issues of
progressively longer maturity (firm pays off each of the
serial bonds as they mature)
4. Floating-rate bonds- bonds with interest rates that
change with current interest rates otherwise available
in the economy
5. Junk bonds- a special type of high interest-rate bond
that carries higher inherent risks
h. How Companies can use Equity to Finance their Operations and LongTerm Growth
i. Common stock- single most important source of capital for
most new companies
1. On the balance sheet, it is separated into two basic
parts:
a. Common stock at par
i.
i. The par value of a stock is the dollar
amount printed on the stock certificate
and has no relation to actual market value
(the price at which the common stock is
currently trading)
b. Capital in excess of par
i. The difference between a stock’s par
value and its offering price
ii. Significantly larger than the par value
account (except when the stocks are
priced very low)
ii. Preferred stock- corporate ownership that gives the
stockholder preference in the distribution of the company’s
profits but no the voting and control rights accorded to
common stockholders
1. Safer investment than common stock
iii. Retained earnings- earnings after expenses and taxes that are
reinvested in the assets of the firm and belong to the owners in
the form of equity
1. The only long-term funds that the company can
generate internally
Functions of Securities Markets
i. Securities markets- the mechanism for buying and selling
securities
1. They make it possible for owners to sell their stocks and
bonds to other investors
2. Providers of liquidity- the ability to turn security
holdings into cash quickly and at minimal expense and
effort
ii. 2 types of securities markets
1. Stock markets
a. Two biggest in the USA are:
i. New York Stock Exchange (NYSE)
ii. NASDAQ
b. Publicly traded companies
c. Now-for-profit companies
d. Electronic exchanges (faster and less-expensive)
2. Over-the-counter market (OTC Market)- a network of
dealers all over the country linked by computers,
telephones, and Teletype machines
a. No central location
b. Small and large companies trade there
c. Regularly accounts for the largest total dollar
value of all of the secondary markets because
most corporate bonds and all U.S. securities are
traded over the counter
j.
Bull and Bear Markets
i. Bull market- a period of large increases in stock prices
1. Bull symbolizes an aggressive, charging market and
rising stock prices
ii. Bear market- declining stock market
1. Bear symbolizes sluggish, retreating activity
a. When stock prices decline very rapidly, the
market is said to crash
Question Of The Days!
1. Which of the following influence marketing strategy by dictating what
elements cannot be included in advertising? (Ch. 12)
a. Social forces
b. Technological forces
c. Political, legal, and regulatory forces
d. Competitive forces
e. Economic forces
2. Which of the following is a social variable of buying behavior? (Ch. 12)
a. Perception
b. Motivation
c. Learning
d. Culture
e. Attitude
3. Dio Ufan Feng is active in recycling and tree planning programs in her
community and she refuses to buy products that have excessive packaging.
This illustrates which of the following factors of buying behavior? (Ch. 12)
a. Attitude
b. Personality
c. Social class
d. Motivation
e. Reference group
4. A marketing research representative who interviews shoppers in a mall is
collecting what type of information? (Ch. 12)
a. Secondary data
b. Basic information
c. Primary data
d. Non-direct information
e. Intermediate data
5. Most new product ideas are rejected during which stage because they seem
inappropriate for the organization? (Ch. 13)
a. Idea development
b. Business analysis
c. Idea screening
d. Product development
e. Test marketing
6. An income statement shows what? (Ch. 14)
a. Revenues, expenses, and net income over a period of time
b. Assets, liabilities, and equity
c. The company’s status at a particular point in time
d. How much income each employee earned
e. How much income the CEO earned
7. The amount of money budgeted for the purchase of long-term assets is called
what?
a. Master budget
b. Year’s budget
c. Current budget
d. Fixed budget
e. Capital budget