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Defining Marketing For The 21st Century

noreply@blogger.com (On2thebadguy) — Sun, 27 Sep 2009 20:29:00 -0700

Chapter 1: Defining Marketing for the 21st Century

GENERAL CONCEPT QUESTIONS

Multiple Choice

1. The most formal definition of marketing is ________.

a. meeting needs profitably

b. identifying and meeting human and social needs

c. the four Ps (product, price, place, promotion)

d. 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

e. improving the quality of life for consumers

Answer: d Page: 5 Difficulty: Medium

2. ________ takes place when at least one party to a potential exchange thinks about the means of achieving desired responses from other parties.

a. Marketing management

b. Forecasting

c. Segmentation

d. Targeting

e. Distribution

Answer: a Page: 5 Difficulty: Medium AACSB: Communication

3. Marketing management is ________.

a. managing the marketing process

b. monitoring the profitability of the company’s products and services

c. selecting target markets

d. developing marketing strategies to move the company forward

e. the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value

Answer: e Page: 5 Difficulty: Easy

4. A social definition of marketing says ________.

a. effective marketing requires companies to remove intermediary parties to achieve a closer connection with direct consumers

b. a company should focus exclusively on achieving high production efficiency, low costs, and mass distribution to facilitate the broadest possible access to the company’s products

c. marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others

d. marketing is the process of extracting maximal value from consumers to facilitate corporate growth

e. marketing is the process of aggressive selling and promotion to encourage the purchase of products that might otherwise be unsought by the consumer

Answer: c Page: 5 Difficulty: Medium

5. ________ goods constitute the bulk of most countries’ production and marketing efforts.

a. Durable

b. Impulse

c. Physical

d. Service

e. Event

Answer: c Page: 6 Difficulty: Medium

6. As economies advance, a growing proportion of their activities focuses on the production of ________.

a. products

b. events

c. experiences

d. places

e. services

Answer: e Page: 6 Difficulty: Easy AACSB: Analytic Skills

7. ________ actively work to build a strong, favorable, and unique image in the minds of their target publics.

a. Information

b. Shopping goods

c. Durable goods

d. Organizations

e. Properties

Answer: d Page: 7 Difficulty: Medium AACSB: Analytic Skills

8. Charles Revson of Revlon observed: “In the factory, we make cosmetics; in the store, ________.”

a. we make profits

b. we challenge competitors

c. we implement ads

d. we sell hope

e. we sell quality

Answer: d Page: 7 Difficulty: Easy AACSB: Reflective Thinking

9. A ________ is someone seeking a response (attention, a purchase, a vote, a donation) from another party, called the ________.

a. salesperson; customer

b. fund-raiser; contributor

c. politician; voter

d. marketer; prospect

e. celebrity; audience

Answer: d Page: 7 Difficulty: Hard AACSB: Analytic Skills

10. In ________, consumers may share a strong need that cannot be satisfied by an existing product.

a. negative demand

b. latent demand

c. declining demand

d. irregular demand

e. nonexistent demand

Answer: b Page: 8 Difficulty: Medium

11. In ________, more customers would like to buy the product than can be satisfied.

a. latent demand

b. irregular demand

c. overfull demand

d. excessive

e. negative demand

Answer: c Page: 8 Difficulty: Medium

12. In ________, consumers dislike the product and may even pay a price to avoid it.

a. nonexistent demand

b. overfull demand

c. irregular demand

d. negative demand

e. declining demand

Answer: d Page: 8 Difficulty: Medium

13. Marketers often use the term ________ to cover various groupings of customers.

a. people

b. buying power

c. demographic segment

d. social class position

e. market

Answer: e Page: 9 Difficulty: Hard AACSB: Analytic Skills

14. Companies selling mass consumer goods and services such as soft drinks, cosmetics, air travel, and athletic shoes and equipment spend a great deal of time trying to establish a superior brand image in markets called ________.

a. business markets

b. global markets

c. consumer markets

d. nonprofit and governmental markets

e. service markets

Answer: c Page: 9 Difficulty: Medium AACSB: Analytic Skills

15. Much of a brand’s strength in consumer markets depends on ________.

a. developing a superior product

b. creating superior packaging

c. ensuring the product’s availability

d. backing the product with engaging communications and reliable service

e. all of the above

Answer: e Page: 9 Difficulty: Hard AACSB: Analytic Skills

16. In business markets, advertising can play a role, but a stronger role may be played by the sales force, ________, and the company’s reputation for reliability and quality.

a. brand image

b. distribution

c. promotion

d. price

e. performance

Answer: d Pages: 9–10 Difficulty: Hard AACSB: Communication

17. Global marketers must decide ________.

a. which countries to enter

b. how to enter each country (as an exporter, licenser, joint venture partner, contract manufacturer, or solo manufacturer)

c. how to adapt their product and service features to each country

d. how to price their products in different countries

e. all of the above

Answer: e Page: 10 Difficulty: Medium AACSB: Reflective Thinking

18. Mohan Sawhney has proposed the concept of ________ to describe a cluster of complementary products and services that are closely related in the minds of consumers but are spread across a diverse set of industries.

a. metamarket

b. vertical integration

c. horizontal integration

d. betamarket

e. synchronized marketing

Answer: a Page: 10 Difficulty: Hard

19. The ________ process consists of analyzing marketing opportunities, selecting target markets, designing marketing strategies, developing marketing programs, and managing the marketing effort.

a. marketing planning

b. strategic planning

c. market research

d. opportunity analysis

e. share of customer

Answer: a Page: 11 Difficulty: Medium AACSB: Analytic Skills

20. ________ are basic human requirements; ________ are the ways in which we satisfy those requirements, and they are shaped by our society.

a. Wants; needs

b. Demands; wants

c. Needs; wants

d. Needs; demands

e. Demands; needs

Answer: c Page: 12 Difficulty: Medium AACSB: Ethical Reasoning

21. A(n) ________ need is a need that the consumer explicitly verbalizes.

a. stated

b. real

c. unstated

d. delight

e. secret

Answer: a Page: 12 Difficulty: Hard AACSB: Reflective Thinking

22. The identification and profiling of distinct groups of buyers who might prefer or require varying product and service mixes is known as ________.

a. segmentation

b. integration

c. disintermediation

d. targeting

e. partner relationship management

Answer: a Page: 13 Difficulty: Medium

23. Companies address needs by putting forth a(n) ________, a set of benefits that they offer to customers to satisfy their needs.

a. brand

b. value proposition

c. offering

d. target market

e. demand

Answer: b Page: 13 Difficulty: Medium

24. A(n) ________ need is one that motivates the consumer but that the consumer is reluctant or unwilling to explicitly verbalize.

a. real

b. unstated

c. delight

d. secret

e. stated

Answer: d Page: 13 Difficulty: Hard AACSB: Reflective Thinking

25. During market segmentation analysis, the marketer identifies which segments present the greatest opportunity. These segments are called ________.

a. target markets

b. primary markets

c. tertiary markets

d. demographic markets

e. focused markets

Answer: a Page: 13 Difficulty: Medium AACSB: Analytic Skills

26. For each target market, the firm develops a ________. The offering is then positioned in the minds of the target buyers as delivering some central benefit(s).

a. value offering

b. niche offering

c. market offering

d. segment offering

e. social offering

Answer: c Page: 13 Difficulty: Medium

27. ________ reflects a customer’s judgment of a product’s performance in relation to his or her expectations.

a. Loyalty

b. Satisfaction

c. Value

d. Expectations

e. Comparison shopping

Answer: b Page: 14 Difficulty: Medium AACSB: Reflective Thinking

28. If a marketer decides to use warehouses, transportation companies, banks, and insurance companies to facilitate transactions with potential buyers, the marketer is using what is called a ________.

a. service channel

b. distribution channel

c. brand channel

d. relationship channel

e. intermediary channel

Answer: a Page: 14 Difficulty: Medium AACSB: Analytic Skills

29. The ________ is a long channel stretching from raw materials to components to final products that are carried to final buyers.

a. communication channel

b. distribution channel

c. supply chain

d. service channel

e. marketing channel

Answer: c Page: 14 Difficulty: Medium

30. Value reflects ________.

a. the price consumers are charged for a product

b. the cost of manufacturing a product

c. the degree to which consumer demand for the product is positive

d. the sum of the perceived tangible and intangible benefits and costs to customers

e. all of the above

Answer: d Page: 14 Difficulty: Hard AACSB: Ethical Reasoning

31. ________ includes all the actual and potential rival offerings and substitutes that a buyer might consider.

a. Competition

b. The product offering

c. A value proposition

d. The supply chain

e. The marketing environment

Answer: a Page: 14 Difficulty: Easy AACSB: Reflective Thinking

32. The ________ includes the actors involved in producing, distributing, and promoting the offering. The main actors are the company, suppliers, distributors, dealers, and the target customers.

a. operations environment

b. management environment

c. strategic environment

d. task environment

e. tactical environment

Answer: d Page: 15 Difficulty: Medium AACSB: Analytic Skills

33. Many countries have ________ industries to create greater competition and growth opportunities.

a. open-market

b. deregulated

c. regulated

d. scientifically segmented

e. created mass market

Answer: b Page: 15 Difficulty: Medium AACSB: Multicultural/Diversity

34. Rising promotion costs and shrinking profit margins are the result of ________.

a. changing technology

b. globalization

c. deregulation

d. privatization

e. heightened competition

Answer: e Page: 15 Difficulty: Hard AACSB: Reflective Thinking

35. Industry boundaries are blurring rapidly as companies identify new opportunities at the intersection of two or more industries—this is called ________.

a. globalization

b. customization

c. industry convergence

d. heightened competition

e. acquisition

Answer: c Page: 15 Difficulty: Medium

36. In response to giant retailers and category killers, entrepreneurial retailers are building entertainment into stores with coffee bars, lectures, demonstrations, and performances. They are marketing a(n) ________ rather than a product assortment.

a. experience

b. customer value

c. customer delight

d. total service solution

e. intangible benefit(s)

Answer: a Page: 15 Difficulty: Medium AACSB: Reflective Thinking

37. In response to threats from such companies as AOL, Amazon.com, Yahoo!, eBay, E*TRADE, and dozens of others, established manufacturers and retailers became “brick-and-click” oriented by adding online services to their existing offerings. This process became known as ________.

a. reintermediation

b. disintermediation

c. e-commerce

d. e-collaboration

e. new-market synchronization

Answer: a Page: 16 Difficulty: Hard AACSB: Use of IT

38. Many brick-and-click competitors became stronger contenders in the marketplace than the pure-click firms because they had a larger pool of resources to work with and ________.

a. better prices

b. greater value

c. well-established brand names

d. one-on-one communications

e. direct-selling capability

Answer: c Page: 16 Difficulty: Medium AACSB: Use of IT

39. Managers of ________-oriented businesses concentrate on achieving high production efficiency, low costs, and mass distribution.

a. selling

b. product

c. production

d. marketing

e. consumer

Answer: c Page: 18 Difficulty: Medium AACSB: Reflective Thinking

40. The feasibility of companies dealing with customers one at a time has risen as a result of advances in ________, computers, the Internet, and database marketing software.

a. improved communication flow

b. information technology

c. just-in-time manufacturing

d. factory customization

e. customer-centered strategies

Answer: d Page: 18 Difficulty: Hard AACSB: Use of IT

41. The ________ concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.

a. product

b. marketing

c. production

d. selling

e. holistic marketing

Answer: a Page: 18 Difficulty: Easy

42. The ________ is practiced most aggressively with unsought goods, goods that buyers normally do not think of buying, such as insurance, encyclopedias, and cemetery plots.

a. marketing concept

b. selling concept

c. production concept

d. product concept

e. holistic marketing concept

Answer: b Page: 19 Difficulty: Medium AACSB: Analytic Skills

43. The ________ concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organization’s products.

a. production

b. selling

c. marketing

d. product

e. holistic marketing

Answer: b Page: 19 Difficulty: Medium

44. Several scholars have found that companies who embrace the marketing concept achieve superior performance. This was first demonstrated for companies practicing a ________—understanding and meeting customers’ expressed needs.

a. reactive market orientation

b. proactive marketing orientation

c. total market orientation

d. impulsive market orientation

e. holistic market orientation

Answer: a Page: 19 Difficulty: Medium

45. According to Theodore Levitt, who drew contrasts between the selling and marketing concepts, ________ is preoccupied with the need to convert products into cash.

a. marketing

b. selling

c. direct marketing

d. holistic marketing

e. service marketing

Answer: b Page: 19 Difficulty: Medium

46. Companies that practice both a reactive and proactive marketing orientation are implementing a ________ and are likely to be the most successful.

a. total market orientation

b. external focus

c. customer focus

d. competitive, customer focus

e. confrontation process

Answer: a Page: 19 Difficulty: Medium AACSB: Reflective Thinking

47. Companies that adopt and employ the marketing concept switch from being solely product centered to being more ________ centered.

a. competency

b. strategy

c. marketing

d. customer

e. sales

Answer: d Page: 19 Difficulty: Hard AACSB: Analytic Skills

48. ________ can be seen as the development, design, and implementation of marketing programs, processes, and activities that recognizes the breadth and interdependencies of their effects.

a. Niche marketing

b. Holistic marketing

c. Relationship marketing

d. Supply chain marketing

e. Demand-centered marketing

Answer: b Pages: 19–20 Difficulty: Medium AACSB: Reflective Thinking

49. ________ marketing aims to build mutually satisfying long-term relations with key parties such as customers, suppliers, distributors, and other marketing partners.

a. Holistic

b. Demand-based

c. Direct

d. Relationship

e. Synthetic

Answer: d Page: 20 Difficulty: Easy AACSB: Communication

50. The strength of the ________ depends on the mutually profitable business relationships built by the company and its supporting stakeholders.

a. sales network

b. holistic union

c. marketing network

d. supply chain network

e. integrated network

Answer: c Page: 22 Difficulty: Hard AACSB: Communication

51. One traditional depiction of marketing activities is in terms of the marketing mix or four Ps. The four Ps are characterized as being ________.

a. product, positioning, place, and price

b. product, production, price, and place

c. promotion, place, positioning, and price

d. place, promotion, production, and positioning

e. product, price, promotion, and place

Answer: e Page: 22 Difficulty: Medium

52. From a buyer’s point of view, each marketing tool is designed to deliver a customer benefit. The SIVA customer-centric breakdown of marketing activities includes ________.

a. sale, interaction, voice, and availability

b. solution, information, value, and access

c. satisfaction, intention, value, and account

d. situation, importance, variability, and awareness

e. none of the above

Answer: b Page: 23 Difficulty: Medium AACSB: Multicultural/Diversity

53. A firm can ________ only in the long run.

a. reduce its sales-force size

b. develop new products

c. change its price

d. modify advertising expenditures

e. All of the above may be done in the short or long run.

Answer: b Page: 23 Difficulty: Medium AACSB: Reflective Thinking

54. Holistic marketing incorporates ________, ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management.

a. profit objectives

b. share of customer

c. internal marketing

d. the marketing mix

e. strategic planning

Answer: c Page: 24 Difficulty: Hard AACSB: Analytic Skills

55. Companies are recognizing that much of their market value comes from ________, particularly their brands, customer base, employees, distributor and supplier relations, and intellectual capital.

a. variable assets

b. the value proposition

c. intangible assets

d. tangible assets

e. customer preferences

Answer: c Page: 26 Difficulty: Easy AACSB: Reflective Thinking

56. Holistic marketing incorporates ________, an understanding of broader concerns in the ethical, environmental, legal, and social context of marketing activities.

a. safe product design

b. cultural marketing

c. social responsibility marketing

d. cross-functional teams

e. direct-sales policies

Answer: c Page: 26 Difficulty: Medium

57. The ________ holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

a. customer-centered business

b. focused business model

c. societal marketing concept

d. ethically responsible marketing manager

e. production-centered business

Answer: c Page: 27 Difficulty: Medium AACSB: Analytic Skills

58. At the heart of any marketing program is the ________—the firm’s tangible offering to the market.

a. service offer

b. product

c. sales support team

d. packaging

e. auxiliary offer

Answer: b Page: 29 Difficulty: Medium AACSB: Analytic Skill

59. ________ activities include those the company undertakes to make the product accessible and available to target customers.

a. Consumer behavior

b. Market segmentation

c. Marketing research

d. Channel

e. New-product development

Answer: d Pages: 29-30 Difficulty: Medium AACSB: Communication

60. Marketing feedback and ________ processes are necessary to understand the efficiency and effectiveness of marketing activities and how both could be improved.

a. control

b. analysis

c. measurement

d. retrospective

e. consumer behavior

Answer: a Page: 30 Difficulty: Medium AACSB: Analytic Skills

True/False

61. A short definition of marketing is “meeting needs profitably.”

Answer: True Page: 5 Difficulty: Easy AACSB: Analytic Skills

62. Value marketing is the “art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.”

Answer: False Page: 5 Difficulty: Medium

63. Services constitute the bulk of most countries’ production and marketing effort.

Answer: False Page: 6 Difficulty: Medium AACSB: Analytic Skills

64. The U.S. economy today consists of a 70–30 services-to-goods mix.

Answer: True Page: 6 Difficulty: Medium

65. “Friends Don’t Let Friends Drive Drunk,” is an example of marketing an experience to an interested audience.

Answer: False Page: 7 Difficulty: Hard AACSB: Reflective Thinking

66. Unwholesome demand occurs when consumers’ purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.

Answer: False Page: 8 Difficulty: Hard AACSB: Analytic Skills

67. When consumers share a strong need that cannot be satisfied by an existing product, they are engaged in latent demand.

Answer: True Page: 8 Difficulty: Medium

68. Companies selling goods and services in the global marketplace have the advantage of being able to sell the goods and services in almost the same way as they do in their domestic market.

Answer: False Page: 10 Difficulty: Easy AACSB: Multicultural/Diversity

69. Companies selling their goods to nonprofit organizations may charge an extra premium over their normal prices because these organizations are largely indifferent to price.

Answer: False Page: 10 Difficulty: Medium AACSB: Reflective Thinking

70. A marketspace is physical, as when you shop in a store.

Answer: False Page: 10 Difficulty: Medium AACSB: Use of IT

71. Wants are basic human requirements such as food or air.

Answer: False Page: 12 Difficulty: Medium

72. Demands are wants for specific products backed by an ability to pay.

Answer: True Page: 12 Difficulty: Easy AACSB: Analytic Skills

73. Most marketers satisfy everyone in a market—that’s how they stay in business.

Answer: False Page: 13 Difficulty: Medium

74. The customer-value triad consists of a combination of quality, service, and price.

Answer: True Page: 14 Difficulty: Hard AACSB: Analytic Skills

75. A distribution channel includes distributors, wholesalers, retailers, and agents that display, sell, or deliver the physical product or service(s) to the buyer or user.

Answer: True Page: 14 Difficulty: Easy

76. The main actors in the task environment are the components of demographics, economics, physical setting, technology, the political-legal system, and the social-cultural arena.

Answer: False Page: 14 Difficulty: Medium AACSB: Analytic Skills

77. Regulation of industries has created greater competition and growth opportunities because the playing field has been leveled.

Answer: False Page: 15 Difficulty: Hard AACSB: Reflective Thinking

78. Industry boundaries are blurring at an incredible rate as companies are recognizing that new opportunities lie at the intersection of two or more industries.

Answer: True Page: 15 Difficulty: Medium

79. The overabundance of information available on the Internet has made it more difficult for consumers to compare product features and prices.

Answer: False Page: 16 Difficulty: Easy AACSB: Reflective Thinking

80. Companies can facilitate and speed external communication among customers by creating online and off-line “buzz” through brand advocates and user communities.

Answer: True Page: 17 Difficulty: Easy AACSB: Communication

81. The proliferation of targeted media and communication channels has allowed marketers to become much more aware of their target consumers’ preferences and to customize both products and messages for individual consumers.

Answer: True Page: 17 Difficulty: Medium AACSB: Communication

82. The marketing concept is one of the oldest concepts in business.

Answer: False Page: 18 Difficulty: Medium

83. The selling concept holds that consumers will favor those products that offer the most quality, performance, or innovative features.

Answer: False Page: 18 Difficulty: Medium AACSB: Analytic Skills

84. The marketing concept stresses a customer-centered approach to marketing.

Answer: True Page: 19 Difficulty: Easy AACSB: Analytic Skills

85. The selling concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies.

Answer: False Page: 19 Difficulty: Medium AACSB: Analytic Skills

86. Relationship marketing aims to build mutually satisfying long-term relationships with key parties.

Answer: True Page: 20 Difficulty: Medium

87. Attracting a new customer may cost five times as much as doing a good enough job to retain an existing one.

Answer: True Page: 22 Difficulty: Medium AACSB: Analytic Skills

88. The marketing-mix component called promotion includes such items as product variety, design, packaging, services, and warranties.

Answer: False Page: 23 Difficulty: Medium

89. When a marketer makes decisions involving channels, assortments, locations, and transportation, the marketer is making what are called place decisions.

Answer: True Page: 23 Difficulty: Medium

90. Advertising, sales promotion, and direct marketing are all part of what is called the offering mix.

Answer: False Page: 23 Difficulty: Medium

91. One of the key themes of integrated marketing is that there are very few marketing activities that can effectively communicate and deliver value.

Answer: False Page: 22 Difficulty: Medium AACSB: Reflective Thinking

92. Internal marketing is an appropriate practice to be used in holistic marketing.

Answer: True Page: 24 Difficulty: Easy AACSB: Reflective Thinking

93. In most companies, marketing should focus on the customer and other departments should focus on the business itself.

Answer: False Page: 24 Difficulty: Easy AACSB: Reflective Thinking

94. Performance marketing involves reviewing metrics assessing market share, customer loss rate, customer satisfaction, and product quality in the evaluation of the effectiveness of marketing activities.

Answer: True Page: 26 Difficulty: Medium

95. The selling relationship concept holds that consumers will prefer products that are ethical, environmentally responsible, legal, and social in the context of marketing activities and programs.

Answer: False Page: 27 Difficulty: Medium AACSB: Analytic Skills

96. The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and the society’s well-being.

Answer: True Page: 27 Difficulty: Easy

97. Cause-related marketing involves donating a percentage of revenues to a specific cause based on the revenue occurring during the announced period of support.

Answer: True Page: 27 Difficulty: Medium AACSB: Analytic Skills

98. Making gifts of money, goods, or time to help nonprofit organizations, groups, or individuals is known as corporate philanthropy.

Answer: True Page: 27 Difficulty: Medium

99. To understand what is happening inside and outside the company, the company needs a reliable marketing information system.

Answer: True Page: 28 Difficulty: Easy AACSB: Reflective Thinking

100. Because of surprises and disappointments that can occur as marketing plans are implemented, the company will need feedback and control to improve itself.

Answer: True Page: 30 Difficulty: Easy AACSB: Reflective Thinking

Essay

101. Marketing has been described being both an “art” and a “science.” Discuss the differences and similarities between these two marketing thrusts. Provide your theoretical response and a “real-life” example where you have seen both processes work effectively at creating customer value and loyalty.

Suggested Answer: The student should demonstrate his or her understanding that the marketer must use data to understand customer needs and translate this understanding into properly designed products and services. They should also see the “art” side of human behavior, where the customer makes decisions based on emotions, such as the perceived benefits.

Page: 5 Difficulty: Medium AACSB: Reflective Thinking

102. Marketing people are involved in marketing 10 types of entities. List and briefly characterize those entities.

Suggested Answer: The types of entities that marketing people are involved in marketing are (1) goods—physical goods, (2) services—hotels and car rental, (3) events—time-based events such as trade shows, (4) experiences—Walt Disney’s Magic Kingdom, (5) persons—celebrity marketing, (6) places—cities, states, regions, and even whole nations, (7) properties—intangible rights of ownership of either real property or financial property, (8) organizations—corporate identity, (9) information—information produced and marketed as a product, and (10) ideas—marketing the basic idea of a market offering.

Pages: 6–7 Difficulty: Hard AACSB: Analytic Skills

103. Marketers are skilled in stimulating demand for a company’s products, but this is too limited a view of the tasks they perform. Just as production and logistics professionals are responsible for supply management, marketers are responsible for demand management. Marketing managers seek to influence the level, timing, and composition of demand to meet the organization’s objectives. List and briefly characterize the eight demand states described in the text.

Suggested Answer: The eight different demand states are (1) negative demand—consumers dislike the product and may even pay a price to avoid it, (2) nonexistent demand—consumers may be unaware or uninterested in the product, (3) latent demand—consumers may share a strong need that cannot be satisfied by an existing product, (4) declining demand—consumers begin to buy the product less frequently or not at all, (5) irregular demand—consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis, (6) full demand—consumers are adequately buying all products put into the marketplace, (7) overfull demand—more consumers would like to buy the product than can be satisfied, and (8) unwholesome demand—consumers may be attracted to products that have undesirable social consequences.

Page: 8 Difficulty: Hard AACSB: Analytic Skills

104. We can distinguish among five types of customer needs. List and provide an example of each of those customer needs.

Suggested Answer: The five types of customer needs are (note the example from the text): (1) stated needs—the customer wants an inexpensive car, (2) real needs—the customer wants a car whose operating cost, not its initial price, is low, (3) unstated needs—the customer expects good service from the dealer, (4) delight needs—the customer would like the dealer to include an onboard navigation system, and (5) secret needs—the customer wants to be seen by friends as a savvy consumer.

Pages: 12–13 Difficulty: Medium AACSB: Analytic Skills

105. Distinguish between the concepts of value and satisfaction.

Suggested Answer: The offering will be successful if it delivers value and satisfaction to the target buyer. The buyer chooses between different offerings on the basis of which is perceived to deliver the most value. Value reflects the perceived tangible and intangible benefits and costs to customers. Value can be seen as primarily a combination of quality, service, and price (called the customer-value triad). Satisfaction reflects a person’s comparative judgments resulting from a product’s perceived performance (or outcome) in relation to his or her expectations.

Pages: 13–14 Difficulty: Medium AACSB: Reflective Thinking

106. Examine and document the factors that have brought about customers’ higher expectations of their suppliers. What are the major shifts in marketing management that have brought about these changes?

Suggested Answer: Students may not understand that our world’s capacity to produce products exceeds the needs. Therefore, customers have more choices and can be more demanding. The time crunch has allowed new providers to enter the market. For example, Netflix competes effectively with Blockbuster Video because they deliver videos to your home. It’s service like this that fits the customer needs to satisfy what money can buy—time. Students may use appropriate marketing management shifts as described in the chapter.

Pages: 16–17 Difficulty: Hard AACSB: Reflective Thinking

107. The competing concepts under which organizations have conducted marketing activities include: the production concept, product concept, selling concept, marketing concept, and holistic marketing concept. Evaluate the advantages and disadvantages of each concept as defined and presented in your textbook. Which concept do you believe is the most effective? Why?

Suggested Answer: Although students will be expected to research each concept, they should conclude the most effective concept is the holistic marketing concept, where companies need to have a more complete, cohesive approach that goes beyond traditional applications of the marketing concept.

Pages: 18–22 Difficulty: Medium AACSB: Reflective Thinking

108. Increasingly, a key goal of marketing is to develop deep, enduring relationships with all people or organizations that could directly or indirectly affect the success of the firm’s marketing activities. Relationship marketing has the aim of building mutually satisfying long-term relations with key parties—customers, suppliers, distributors, and other marketing partners—in order to earn and retain their business.

Discuss the merits of relationship marketing. Describe in detail a company who is in business today that models relationship marketing.

Suggested Answer: Students should understand the relationship between any supplier and customer is not just in the mechanics of the transaction, but more importantly how the customer is treated during the transaction. The better the relationship, the more apt the customer will remain loyal. They should pick a company that has served them well and made them feel special each and every time.

Pages: 20–22 Difficulty: Medium AACSB: Communication

109. Identify and define the four Ps and the corresponding consumer-oriented SIVA dimensions.

Suggested Answer: The four Ps are: Product (product variety, quality, design, features, brand name, packaging, sizes, services, warranties, returns), Price (list price, discounts, allowances, payment period, credit terms), Promotion (sales promotion, advertising, sales force, public relations, direct marketing), and Place (channels, coverage, assortments, locations, inventory, transportation). A complementary breakdown of marketing activities that approaches the process from a customer-centric viewpoint is the SIVA framework: Solution (How can I solve my problem?), Information (Where can I learn more about it?), Value (What is my total sacrifice to get the solution?), and Access (Where can I find it?).

Page: 23 Difficulty: Hard AACSB: Analytic Skills

110. According to Starbucks Chairman Howard Schultz, “Consumers now commonly engage in a cultural audit of [product and service] providers. People want to know your value and ethics demonstrated by how you treat employees, the community in which you operate.” Discuss the concept of social responsibility marketing and how it impacts both companies and consumers.

Suggested Answer: The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfaction more effectively and efficiently than competitors in a way that preserves or enhances the consumer’s and society’s long-term well-being. Many companies actively engaged in corporate social responsibility campaigns to both motivate employees and attract consumers. As goods become more commoditized, and as consumers grow more socially conscious, some companies are adding social responsibility as a way to differentiate themselves from competitors, build consumer preference, and achieve notable sales and profit gains. They believe customers will increasingly look for signs of good corporate citizenship.

Pages: 26–27 Difficulty: Medium AACSB: Ethical Reasoning

APPLICATION QUESTIONS

Multiple Choice

111. When IKEA noticed that people wanted good furniture at a substantially lower price and created knockdown furniture, they demonstrated marketing savvy and turned a private or social need into a(n) ________.

a. market need

b. profitable business opportunity

c. product development

d. invention

e. customer want

Answer: b Page: 5 Difficulty: Medium AACSB: Reflective Thinking

112. Car rental firms, barbers, and management consultants provide ________.

a. goods

b. experiences

c. places

d. services

e. information

Answer: d Page: 6 Difficulty: Easy AACSB: Analytic Skills

113. Walt Disney’s Magic Kingdom represents ________ marketing: Customers visit a fairy kingdom, a pirate ship, or a haunted house.

a. experiential

b. services

c. event

d. celebrity

e. goods

Answer: a Page: 6 Difficulty: Medium AACSB: Analytic Skills

114. Janet is very upset that she can’t get tickets to the new Rolling Stones concert. “Why do they keep advertising the show if you can’t get tickets?” wonders Janet. Which of the following demand states applies to Janet’s situation?

a. nonexistent demand

b. latent demand

c. full demand

d. unwholesome demand

e. overfull demand

Answer: e Page: 8 Difficulty: Medium AACSB: Analytic Skills

115. When Jack purchases his air-conditioning unit in the winter to avoid the high prices found in the summer, he is exhibiting ________ demand.

a. irregular

b. declining

c. impulse

d. latent

e. negative

Answer: a Page: 8 Difficulty: Medium AACSB: Analytic Skills

116. Julia hates smoking and is willing to pay an extra tax just to help eliminate smoking in her city. She is exhibiting ________ with respect to smoking.

a. negative demand

b. nonexistent demand

c. latent demand

d. declining demand

e. unwholesome demand

Answer: a Page: 8 Difficulty: Medium AACSB: Analytic Skills

117. In a modern exchange economy, all of the following markets are likely to exist EXCEPT ________.

a. resource market

b. manufacturer market

c. government market

d. consumer market

e. class market

Answer: e Page: 9 Difficulty: Medium AACSB: Reflective Thinking

118. In a simple marketing system, if the automobile industry sends advertising and personal sales messages to prospective buyers, it expects ________ in exchange.

a. goods

b. services

c. money

d. information

e. image enhancement

Answer: d Page: 9 Difficulty: Medium AACSB: Analytic Skills

119. Automobile manufactures, new car and used car dealers, financing companies, and insurance companies are all part of the automobile ________.

a. marketplace

b. marketspace

c. metamediary

d. marketportal

e. metamarket

Answer: e Page: 10 Difficulty: Medium

120. When Frank identifies a marketing opportunity to market his company’s ski and snowboard helmets to baby boomers interested in winter sports through advertisements in enthusiast magazines, Frank is going through the _____.

a. metamarket

b. marketing planning process

c. social marketing concept

d. supply chain conglomeration

e. negative demand

Answer: b Page: 11 Difficulty: Medium AACSB: Analytic Skills

121. When a customer has a(n) ________ need, the customer might expect something like admiration from friends because he or she has purchased something that might indicate a certain market savvy.

a. real

b. unstated

c. delight

d. secret

e. stated

Answer: d Page: 13 Difficulty: Hard AACSB: Analytic Skills

122. When Volvo runs advertisements suggesting that it is the safest car money can buy, it is engaging in which of the following forms of marketing programming?

a. Technological

b. Service

c. Market segmentation

d. Public relations

e. Positioning

Answer: e Page: 13 Difficulty: Medium AACSB: Communication

123. When online dot-coms, such as eBay and Amazon.com cut out the majority of middlemen that normally would participate in the exchange process, they were advocating ________.

a. category killers

b. every-day-low prices

c. reintermediation

d. disintermediation

e. supply chain conglomeration

Answer: d Page: 16 Difficulty: Medium AACSB: Use of IT

124. Under which of the following company orientations toward the marketplace would we expect to find the “better mousetrap” fallacy?

a. Production concept

b. Product concept

c. Selling concept

d. Marketing concept

e. Holistic marketing concept.

Answer: b Page: 18 Difficulty: Hard AACSB: Reflective Thinking

125. If marketers are characterized as “gardening” rather than “hunting,” the ________ is most likely to be the concept the marketers are following.

a. production concept

b. product concept

c. selling concept

d. marketing concept

e. social responsibility concept

Answer: d Page: 19 Difficulty: Hard AACSB: Reflective Thinking

126. When 3M, HP, and Motorola practice researching or imaging latent needs of consumers through a “probe-and-learn” process, they are most likely using which of the following marketing orientations with respect to their consumers?

a. Selling orientation

b. Promotion orientation

c. Supply-side orientation

d. Reactive market orientation

e. Proactive marketing orientation

Answer: e Page: 19 Difficulty: Medium AACSB: Reflective Thinking

127. Companies that practice ________ are implementing a total market orientation and are likely to be the most successful.

a. reactive market orientation

b. proactive marketing orientation

c. both reactive and proactive marketing orientation

d. consolidation and acquisition

e. “invent and market”

Answer: c Page: 19 Difficulty: Medium AACSB: Reflective Thinking

128. In which of the following dimensions of holistic marketing might we find an emphasis on communications, products and services, and channels?

a. Internal marketing

b. Integrated marketing

c. Socially responsible marketing

d. Global marketing

e. Relationship marketing

Answer: b Page: 21 Difficulty: Medium AACSB: Analytic Skills

129. Kroger supermarkets are aggressively pursuing a strategy of capturing a larger share of the customer’s “stomach.” Which of the following shifts in marketing management is most appropriate for this example?

a. From relying on old market positions to uncovering new ones.

b. From marketing does the marketing to everyone does the marketing.

c. From a focus on gaining market share to a focus on building customer share.

d. From focusing on profitable transactions to focusing on customer lifetime value.

e. From building brands through advertising to building brands through performance and integrated communications.

Answer: c Page: 22 Difficulty: Hard AACSB: Analytic Skills

130. A number of companies—including the Body Shop, Ben & Jerry’s, and Patagonia—have achieved notable sales and profit gains by adopting and practicing a form of the societal marketing concept called ________, by which a company with an image, product, or service to market builds a relationship or partnership with a cause, or a number of causes, for mutual benefit.

a. social marketing

b. environmental marketing

c. cause-related marketing

d. benefit marketing

e. responsible marketing

Answer: c Page: 27 Difficulty: Easy

Short Answer

131. What would be a good social definition of marketing?

Suggested Answer: Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

Page: 5 Difficulty: Medium

132. Discuss the eight demand states with respect to bifocal lenses for glasses.

Suggested Answer: Student answers may vary, but a possible answer includes the following: (1) negative demand—many people don’t want to admit they need bifocals, (2) nonexistent demand—when bifocal lenses were first introduced, people didn’t know they existed, (3) latent demand—before they were introduced, many people thought such a product would be nice, but didn’t think it would ever exist, (4) declining demand—this will occur when something better is invented, such as surgery to repair the eyes, (5) irregular demand—the consumer perceives a need for eye care devices only periodically, possibly when they begin having trouble seeing, (6) full demand—the manufacturers of the lenses are making all they possibly can, (7) overfull demand—the manufacturers of the lenses can’t make enough and inventories are low, and (8) unwholesome demand—seeking alternatives, consumers may find that alternatives have undesirable social consequences.

Page: 8 Difficulty: Hard AACSB: Reflective Thinking

133. New terms are now being used to describe where marketing is done. Using the automobile market, describe automotive buying behavior for a: (1) marketplace, (2) marketspace, and (3) metamarket.

Suggested Answer: Responses to this question should include a reference to the following: (1) marketplace—shopping for an automobile at a dealer’s lot, (2) marketspace—shopping for an automobile via the Internet, eBay, or even designing your own car via a manufacturer’s Web site, and (3) metamarket—(a cluster of complementary products and services that are closely related in the customer’s mind but are spread across a diverse set of industries) that might include insurance companies, the racing industry, the travel industry, the customization industry, et cetera. Individual answers might vary.

Page: 10 Difficulty: Medium AACSB: Analytic Skills

134. Identify the five key functions of the CMO in leading marketing within the organization.

Suggested Answer: The five key functions of the CMO in leading marketing within the organization are: (1) strengthening brands, (2) measuring marketing effectiveness, (3) driving new-product development based on customer needs, (4) getting meaningful customer insights, (5) utilizing new marketing technology.

Page: 11 Difficulty: Medium AACSB: Reflective Thinking

135. Assume that you have been given the task of assisting a company in designing its marketing planning process. What components should be in such a process? Be specific in your answer.

Suggested Answer: The marketing planning process consists of analyzing marketing opportunities, selecting target markets, designing strategies, developing marketing programs, and managing the marketing effort. Students might also review Figure 1.6 for additional information.

Page: 11 Difficulty: Hard AACSB: Analytic Skills

136. Consumers often have many needs that are not readily obvious. Just observing their behavior inside a retail store is not enough to get a true feel for their “needs.” List and briefly describe the five types of needs that most consumers have.

Suggested Answer: The various consumer needs are: (1) stated needs—what the consumer says he or she wants—a car, (2) real needs—the customer wants a car whose operating costs, not its initial price, is low, (3) unstated needs—the customer expects good service and honesty from the dealer, (4) delight needs—the customer would like a DVD player set-up thrown in to guarantee a quick signing of the purchase agreement, and (5) secret needs—inner fantasies such as gaining prestige with members of the opposite sex or friends.

Pages: 12–13 Difficulty: Hard AACSB: Analytic Skills

137. Wal-Mart knows that to reach its target markets three kinds of marketing channels may be used. What are these three marketing channels and how might Wal-Mart use each of them?

Suggested Answer: The three marketing channels are communication, distribution, and service channels. Wal-Mart could use advertising to communicate price specials to consumers (communication channel), use wholesalers to assemble merchandise assortments to be sold in the Wal-Mart stores (distribution channels), and use transportation companies (service channels) to extend Wal-Mart’s global reach.

Page: 14 Difficulty: Hard AACSB: Analytic Skills

138. The marketplace isn’t what it used to be. List and briefly discuss what new behaviors, new opportunities, and new challenges await the marketer in the 21st century.

Suggested Answer: Responses to this question should include: (1) changing technology, (2) globalization, (3) deregulation, (4) privatization, (5) customer resistance, (6) heightened competition, (7) industry convergence, (8) retail transformation, and (9) disintermediation.

Pages: 15–16 Difficulty: Hard AACSB: Reflective Thinking

139. The digital revolution has placed a whole new set of capabilities in the hands of consumers and businesses. Consider what consumers have today that they didn’t have yesterday. As indicated in the chapter, what would appear on such a list?

Suggested Answer: Responses to this question should include: (1) a substantial increase in buying power, (2) a greater variety of available goods and services, (3) a great amount of information about practically anything, (4) a greater ease in interacting and placing and receiving orders, and (5) an ability to compare notes on products and services.

Page: 16 Difficulty: Hard AACSB: Use of IT

140. Discuss the concept of disintermediation and provide an example.

Suggested Answer: Disintermediation grew out of the rush to embrace the dot-coms and e-commerce. Essentially, the dot-coms removed many of the traditional intermediaries that brought goods and services to consumers by encouraging consumers to deal directly with the dot-coms via the Internet. “Brick-and-click” businesses eventually brought some of the intermediaries back through a process called reintermediation.

Page: 16 Difficulty: Medium AACSB: Use of IT

141. The Internet has given today’s companies a new set of capabilities. Among those capabilities is the ability to operate a new information channel. Describe how information can be used by the marketer in this new channel.

Suggested Answer: Companies can operate a powerful new information and sales channel, the Internet, with augmented geographical reach to inform and promote their businesses and products worldwide. By establishing one or more Web sites, a company can list its products and services, its history, its business philosophy, its job opportunities, and other information of interest to visitors. For additional information, see chapter section.

Page: 17 Difficulty: Medium AACSB: Use of IT

142. Arthur Jones has decided to build his manufacturing business (lawn mowers) around the production concept. If this approach is taken, what will be Mr. Jones’ primary areas of concentration as he builds his business?

Suggested Answer: This orientation holds that consumers will prefer products that are widely available and inexpensive. Managers of production-oriented businesses concentrate on high production efficiency, low costs, and mass distribution. This approach is also used when a company wants to expand the market. Students may use these facts as they design their answer.

Page: 18 Difficulty: Medium AACSB: Analytic Skills

143. Illustrate the differences between a reactive market orientation and a proactive marketing orientation. Give an example of a company that uses a proactive marketing orientation

Suggested Answer: In a reactive market orientation a company might be content to keep up with understanding and meeting customers’ expressed needs. In a proactive market orientation a company such as Motorola might prefer to make a practice of researching and imagining latent needs through a “probe-and-learn” process. Students’ answers may vary but the basic concepts of reaction and proactivity should be clear in answers.

Page: 19 Difficulty: Medium AACSB: Analytic Skills

144. The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. What would be the parts of a marketing network for a motorcycle company such as Harley-Davidson?

Suggested Answer: A marketing network consists of the company and its supporting stakeholders. These stakeholders (in Harley-Davidson’s case) might be customers, employees, suppliers, distributors, retailers, repair services, ad agencies, lobby groups, and motorcycle support clubs. The operating principle is simple: Build an effective network of relationships with key stakeholders, and profits will follow.

Page: 22 Difficulty: Medium AACSB: Analytic Skills

145. Linda Evans has been given the task of developing the product portion of her company’s marketing mix. List the components that will likely be included in this element of the marketing mix.

Suggested Answer: Product variety, quality, design, features, brand names, packaging, sizes, services, warranties, and returns are the key elements of the product portion of the marketing mix. To see a more complete diagram of the four Ps process, see Figure 1.5.

Page: 23 Difficulty: Medium AACSB: Analytic Skills

146. Discuss how companies can use the Internet to build their brands. Give an example of a company that has done so.

Suggested Answer: Online marketing activities can be used to build brands by increasing consumer exposure to the brand and creating an interactive experience between the customer and the brand, giving consumers access not only to company-created information but also consumer-generated content. For example, Carnival Connections, an online cruise-booking site, made it easy for cruise fans to compare notes on cruise destinations and onboard entertainment.

Pages: 23–24 Difficulty: Medium AACSB: Reflective Thinking

147. Define internal marketing and its role in the company. Outline how various departments within the company outside marketing can demonstrate a customer focus.

Suggested Answer: Internal marketing must take place on two levels. At one level, the various marketing functions must work together. At the second level, other departments must embrace marketing and “think customer.” Students may use Table 1.1 to furnish various examples of customer-centric focus outside the marketing department.

Pages: 24–25 Difficulty: Hard AACSB: Reflective Thinking

148. According to information provided in the chapter, McDonald’s has been involved in a variety of corporate social initiatives. Give an example of how McDonald’s might initiate cause-related marketing, and define what cause-related marketing is.

Suggested Answer: Cause-related marketing is donating a percentage of revenues to a specific cause based on revenue occurring during the announced period of support. The example used in the chapter noted McDonald’s earmarking of $1 for Ronald McDonald Children’s Charities from the sale of every Big Mac and pizza sold on McHappy Day. Students may create additional examples but each should meet the parameters set above.

Page: 27 Difficulty: Medium AACSB: Analytic Skills

149. You have been given the assignment of justifying cause-related marketing to your board of directors. What would be your primary argument in favor of such a proposal?

Suggested Answer: Companies see cause-related marketing as an opportunity to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage. They believe customers will increasingly look for signs of good corporate citizenship that go beyond supplying rational and emotional benefits.

Page: 27 Difficulty: Hard AACSB: Ethical Reasoning

150. Your firm is in the process of moving from focusing on a financial scorecard as the basis for running and evaluating your organization to a marketing scorecard approach. What is a marketing scorecard approach and what might be some of its components?

Suggested Answer: Top management is going beyond sales revenue alone to examine the marketing scorecard. Today, the shift to the marketing scorecard attempts to interpret what is happening to market share, customer loss rate, customer satisfaction, product quality, and other measures. Managers know changes in marketing indicators predict changes in financial results.

Pages: 26–27 Difficulty: Hard AACSB: Reflective Thinking

Human Resource Management Questions Dessler- Ch. 4

noreply@blogger.com (On2thebadguy) — Fri, 4 Sep 2009 21:08:00 -0700

Chapter 4: Job Analysis

Multiple Choice

1. _____ is the procedures through which one determines the duties associated with positions and the characteristics of people to hire for those positions.

a. Job description

b. Job specification

c. Job analysis

d. Job context

e. None of the above

(c; easy)

2. The information resulting from job analysis is used for writing _____.

a. job descriptions

b. work activities

c. work aids

d. job context

e. performance standards

(a; easy)

3. Which of the following types of information can be collected via a job analysis?

a. work activities

b. human behaviors

c. performance standards

d. job context

e. all of the above

(e; moderate)

4. Information regarding job demands such as lifting weights or walking long distances is included in the information about _____ an HR specialist may collect during a job analysis.

a. work activities

b. human behaviors

c. machines, tools, equipment, and work aids

d. performance standards

e. job context

(b; moderate)

5. Information regarding how, why, and when a worker performs each activity is included in the information about _____ an HR specialist may collect during a job analysis.

a. work activities

b. human behaviors

c. machines, tools, equipment, and work aids

d. performance standards

e. job context

(a; moderate)

6. Information regarding the quantity or quality levels for each job duty is included in the information about _____ an HR specialist may collect during a job analysis.

a. work activities

b. human behaviors

c. machines, tools, equipment, and work aids

d. performance standards

e. job context

(d; moderate)

7. Information regarding job-related knowledge or skills and required personal attributes is included in the information about _____ an HR specialist may collect during a job analysis.

a. work activities

b. human behaviors

c. human requirements

d. performance standards

e. job context

(c; moderate)

8. Information regarding matters such as physical working conditions and work schedule is included in the information about _____ an HR specialist may collect during a job analysis.

a. work activities

b. human behaviors

c. machines, tools, equipment, and work aids

d. performance standards

e. job context

(e; moderate)

9. There are _____ steps in doing a job analysis.

a. three

b. four

c. five

d. six

e. ten

(d; easy)

10. Deciding how to use the resulting information is the _____ step in doing a job analysis.

a. first

b. second

c. third

d. fourth

e. fifth

(a; moderate)

11. The first step in conducting a job analysis is _____.

a. deciding how to use the information

b. reviewing relevant background information

c. selecting representative positions

d. collecting data on job activities

e. developing a job description and job specification

(a; moderate)

12. 12. Reviewing relevant background information such as organization charts, process charts, and job descriptions is the _____ step in doing a job analysis.

a. first

b. second

c. third

d. fourth

e. fifth

(b; moderate)

13. The second step in conducting a job analysis is _____.

a. deciding how to use the information

b. reviewing relevant background information

c. selecting representative positions

d. collecting data on job activities

e. developing a job description and job specification

(b; moderate)

14. Selecting representative positions to use in the job analysis is the _____ step in the process.

a. first

b. second

c. third

d. fourth

e. fifth

(c; moderate)

15. The third step in conducting a job analysis is _____.

a. deciding how to use the information

b. reviewing relevant background information

c. selecting representative positions

d. collecting data on job activities

e. developing a job description and job specification

(c; moderate)

16. Collecting data on job activities, required employee behaviors, working conditions, and human traits and abilities needed to perform the job is the _____ step in the job analysis process.

a. first

b. second

c. third

d. fourth

e. fifth

(d; moderate)

17. The fourth step in conducting a job analysis is _____.

a. deciding how to use the information

b. reviewing relevant background information

c. selecting representative positions

d. collecting data on job activities

e. developing a job description and job specification

(d; moderate)

18. Verifying the job analysis information with the worker performing the job and with his or her immediate supervisor is the _____ step in the job analysis process.

a. first

b. second

c. third

d. fourth

e. fifth

(e; moderate)

19. The fifth step in conducting a job analysis is _____.

a. deciding how to use the information

b. reviewing relevant background information

c. verifying the job analysis information

d. collecting data on job activities

e. developing a job description and job specification

(c; moderate)

20. Developing a job description and job specification is the _____ step in the job analysis process.

a. second

b. third

c. fourth

d. fifth

e. sixth

(e; moderate)

21. The final step in conducting a job analysis is _____.

a. deciding how to use the information

b. reviewing relevant background information

c. selecting representative positions

d. collecting data on job activities

e. developing a job description and job specification

(e; moderate)

22. A(n) _____ shows the flow of inputs to and outputs from the job being analyzed.

a. organization chart

b. process chart

c. value chain

d. job preview

e. job description

(b; moderate)

23. Which term refers to a written statement that describes the activities and responsibilities of the job?

a. job specification

b. job analysis

c. job report

d. job description

e. job context

(d; moderate)

24. A _____ summarizes the personal qualities, traits, skills, and background required for getting the job done.

a. job specification

b. job analysis

c. job report

d. job description

e. job context

(a; moderate)

25. Which of the following is included in the job specifications?

a. personal qualities

b. traits

c. skills

d. required background

e. all of the above

(e; easy)

26. Which of the following methods is used to gather job analysis data?

a. interviews

b. questionnaires

c. observation

d. all of the above

e. none of the above

(d; moderate)

27. Who is interviewed by managers collecting job analysis data?

a. individual employees

b. groups of employees with the same job

c. supervisors who know the job

d. all of the above

e. none of the above

(d; moderate)

28. Which of the following is not an advantage of using interviews to collect job analysis data?

a. it is simple to use

b. some information may be exaggerated or minimized

c. it is quick to collect information

d. it can identify uncommon, but important activities

e. it can be used to explain need for job analysis

(b; moderate)

29. Interviews often include questions about _____.

a. supervisory responsibilities

b. job duties

c. education

d. experience

e. all of the above

(e; easy)

30. In addition to identifying the specific duties associated with a job, a job analysis should also seek to identify the _____.

a. length of time an employee has held the position

b. order of importance

c. frequency of occurrence

d. all of the above

e. b and c only

(e; difficult)

31. For which of the following jobs is direct observation not recommended to collect data used in a job analysis?

a. assembly-line worker

b. accounting clerk

c. engineer

d. receptionist

e. salesperson

(c; difficult)

32. A _____ is the time it takes to complete a job.

a. job specification

b. work cycle

c. work week

d. shift

e. none of the above

(b; moderate)

33. The average cycle time is a(n) _____.

a. minute

b. hour

c. day

d. week

e. it depends on the specific job

(e; easy)

34. When workers change what they would normally do because they are being watched, _____ has occurred.

a. proactivity

b. reactivity

c. cycling

d. diverting

e. none of the above

(b; moderate)

35. Which two data collection methods are frequently used together?

a. direct observation and interviewing

b. questionnaires and direct observation

c. interviewing and questionnaires

d. diaries and interviewing

e. most are used individually

(a; difficult)

36. Jin records every activity she participates in at work along with time in a log. This approach to data collection for job analysis is based on _____.

a. diaries

b. interviews

c. direct observation

d. questionnaires

e. supervisor verification

(a; easy)

37. Which of the following is considered a qualitative approach to job analysis?

a. position analysis questionnaire

b. interviews

c. Department of Labor approach

d. functional job analysis

e. all are qualitative approaches

(b; difficult)

38. Which of the following is considered a quantitative approach to job analysis?

a. interviews

b. diaries

c. Department of Labor Procedure

d. direct observation

e. questionnaires

(c; difficult)

39. What form of data collection involves recording work activities in a log?

a. interviews

b. diaries

c. direct observation

d. questionnaires

e. none of the above

(b; easy)

40. Which of the following is not one of the basic activities included in a position analysis questionnaire?

a. performing skilled activities

b. being physically active

c. operating equipment

d. processing information

e. all are included in a position analysis questionnaire

(e; moderate)

41. The _____ assigns a quantitative score to each job based on its decision-making, skilled activity, physical activity, equipment operation, and information-processing characteristics.

a. Department of Labor Procedure

b. position analysis questionnaire

c. functional job analysis

d. log approach

e. all of the above

(b; moderate)

42. Which quantitative job analysis technique can be conducted online?

a. position analysis questionnaire

b. Department of Labor Procedure

c. functional job analysis

d. all of the above

e. none of the above

(a; difficult)

43. Which of the following is included in a functional job analysis?

a. the extent to which specific instructions are necessary to perform the task

b. the extent to which reasoning and judgment are required to perform the task

c. the mathematical ability required to perform the task

d. the verbal and language facilities required to perform the task

e. all of the above

(e; moderate)

44. Most job descriptions contain sections that cover _____.

a. job summary

b. standards of performance

c. working conditions

d. all of the above

e. none of the above

(d; easy)

45. One uses information from the _____ to write a job specification.

a. job summary

b. job identification

c. job description

d. standards for performance

e. job advertisement

(c; moderate)

46. What type of information is contained in the job identification section of a job description?

a. job title

b. job summary

c. relationships statement

d. major functions or activities

e. all of the above

(a; difficult)

47. Which section of a job description should define the limits of the jobholder’s authority, direct supervision of other personnel, and budgetary limitations?

a. job identification

b. job summary

c. relationships

d. responsibilities and duties

e. pay levels

(d; moderate)

48. When is an employer required to make a “reasonable accommodation” for a disabled individual?

a. any time a disabled individual applies for a position

b. employers are only encouraged to make reasonable accommodations

c. when a disabled individual has the necessary skills, education, and experience to perform the job, but can’t because of the job’s current structure

d. when it would present an undue hardship

e. when the job function is essential

(c; moderate)

49. Job duties that employees must be able to perform, with or without reasonable accommodation, are called _____.

a. essential job functions

b. job requirements

c. primary job activities

d. work activities

e. all of the above

(a; easy)

50. The job specification takes the job description and answers the question, _____?

a. What human traits and experience are required to do this job well

b. When will the supervisor be completely satisfied with a worker’s work

c. What are the four main activities making up this job

d. How many other employees are available to perform job functions

e. What are the performance standards for the job

(a; difficult)

51. When filling jobs with untrained people, the job specifications may include _____.

a. quality of training

b. length of previous service

c. previous job performance

d. physical traits

e. all of the above

(d; moderate)

52. Which of the following work behaviors is considered “generic” or important to all jobs?

a. industriousness

b. intelligence

c. experience

d. morality

e. motivation

(a; moderate)

53. All of the following work behaviors are considered “generic” or important to all jobs except _____.

a. thoroughness

b. attendance

c. experience

d. schedule flexibility

e. industriousness

(c; moderate)

54. _____ means assigning workers additional same-level activities, thus increasing the number of activities they perform.

a. Job rotation

b. Job enrichment

c. Job assignment

d. Job enlargement

e. Job adjustment

(d; easy)

55. _____ means systematically moving workers from one job to another.

a. Job rotation

b. Job enrichment

c. Job assignment

d. Job enlargement

e. Job adjustment

(a; easy)

56. ______ means redesigning jobs in a way that increases the opportunities for the worker to experience feelings of responsibility, achievement, growth, and recognition.

a. Job rotation

b. Job enrichment

c. Job assignment

d. Job enlargement

e. Job adjustment

(b; easy)

57. Who argued that the best way to motivate workers is to build opportunities for challenge and achievement into their jobs via job enrichment?

a. Adam Smith

b. Frederick Taylor

c. Frederick Herzberg

d. Abraham Maslow

e. Milton Friedman

(c; moderate)

58. _____ refers to broadening the responsibilities of the company’s jobs, and encouraging employees not to limit themselves to what’s on their job descriptions.

a. Job rotation

b. Job enrichment

c. Job assignment

d. Job enlargement

e. Dejobbing

(e; easy)

59. Dejobbing can be described as _____.

a. assigning workers additional work at the same level

b. redesigning jobs to increase opportunities for responsibility

c. moving workers from one job to another

d. encouraging employees not to limit themselves to what’s on their job descriptions

e. focusing workers on highly specialized jobs

(d; moderate)

60. Job enrichment can be described as _____.

a. assigning workers additional work at the same level

b. redesigning jobs to increase opportunities for responsibility

c. moving workers from one job to another

d. encouraging employees not to limit themselves to what’s on their job descriptions

e. focusing workers on highly specialized jobs

(b; moderate)

61. Jon works at Hotel International. Some weeks he works in catering but he also works in housekeeping, and in reservations periodically. This is an example of _____.

a. job enlargement

b. job rotation

c. job enrichment

d. dejobbing

e. job specialization

(b; easy)

62. The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance is called _____.

a. job redesign

b. reengineering

c. process engineering

d. job enlargement

e. outsourcing

(b; easy)

63. Describing the job in terms of the measurable, observable, and behavioral competencies necessary for good job performance is called a _____.

a. competency-based job analysis

b. administrative procedure

c. functional job analysis

d. standard classification system

e. none of the above

(a; easy)

64. Competency analysis focuses on _____.

a. what is accomplished

b. how work is accomplished

c. when work is accomplished

d. who accomplishes the work

e. where the work is accomplished

(b; difficult)

65. Traditional job analysis focuses on _____.

a. what is accomplished

b. how work is accomplished

c. when work is accomplished

d. who accomplishes the work

e. where the work is accomplished

(a; difficult)

66. Job competencies are always _____.

a. measurable

b. observable

c. based on goals

d. both a and b

e. all of the above

(d; easy)

67. When a supervisor bases an employee’s training, appraisals, and rewards on the skills and competences he or she needs to achieve his or her goals, the supervisor is using _____.

a. competency analysis

b. traditional analysis

c. performance management

d. functional systems management

e. none of the above

(c; moderate)

True/ False

68. Job analysis produces information used for writing job descriptions and job specifications. (T; easy)

69. The information gathered during a job analysis is primarily used for listing what jobs entail and what kind of people to hire for the job. (T; easy)

70. A process chart shows the organization-wide division of work, how the job in question relates to other jobs, and where the job fits in the overall organization. (F; moderate)

71. Conducting the job analysis is the sole responsibility of the HR specialist. (F; moderate)

72. The interview is the most widely used method for identifying job duties and responsibilities. (T; easy)

73. Job analysis is often a prelude to changing a job’s pay rate. (T; moderate)

74. Interviews used for job analysis typically follow an unstructured format. (F; easy)

75. After completing an interview, the data should be verified with the worker’s immediate supervisor. (T; moderate)

76. Observation as a data collection method in a job analysis is most appropriate for jobs entailing a lot of mental activity. (F; easy)

77. Employers may provide employees pocket dictating machines and pagers to record activities at random times of the work day. (T; moderate)

78. Qualitative approaches are more appropriate than quantitative approaches when one seeks to compare jobs for pay purposes. (F; moderate)

79. There is no standard format for writing a job description. (T; moderate)

80. The statistical analysis method for job specifications is more defensible than the judgmental approach because equal rights legislation forbids using traits that can’t distinguish between high and low job performers. (T; moderate)

81. Job enlargement refers to redesigning jobs in a way that increases responsibility and achievement. (F; moderate)

82. Job rotation is another term for dejobbing. (F; easy)

83. Boundaryless organizations use teams and other mechanisms to make boundaries more permeable. (T; moderate)

84. In reengineered situations, workers tend to become collectively responsible for overall results rather than being individually responsible for just their own tasks. (T; difficult)

85. Job analysis experts are concerned that in high performance work environments in which employers need workers to seamlessly move from job to job and exercise self-control, job descriptions based on lists of job-specific duties may actually inhibit the flexible behavior companies need. (T; moderate)

86. Organizations define competencies in the same way. (F; moderate)

87. Functional-based job analysis means describing the job in terms of the measurable, observable, behavioral competencies that an employee doing that job must exhibit to do the job well. (F; difficult)

88. Competency-based job analysis is more job-focused than traditional job analysis. (F; difficult)

89. Competency analysis focuses on how the worker meets the job’s objectives or actually accomplishes the work. (T; moderate)

90. Performance management means basing employee training, appraisals, and rewards on the skills and competencies he or she needs to achieve his or her goals. (T; moderate)

91. A job’s required competencies might include general competencies, leadership competencies, and technical competencies. (T; moderate)

Essay/ Short Answer

92. Explain how job analysis provides information useful in recruitment and selection, compensation, and performance appraisal. (moderate)

Answer: Job analysis provides information for recruitment and selection by laying out what the job entails and what human characteristics are required to perform these activities. This information helps management decide what sort of people to recruit and hire. Job analysis information is also crucial for estimating the value of each job and its appropriate compensation. A performance appraisal compares each employee’s actual performance with his or her performance standards. Managers use job analysis to determine the job’s specific activities and performance standards.

93. List the steps in conducting a job analysis. (moderate)

Answer: There are six steps in doing a job analysis. Step 1 is to decide how one will use the information. Step 2 is to review relevant background information such as organization charts, process charts, and job descriptions. Step 3 is to select representative positions. Step 4 is to analyze the job by collecting data on job activities, required employee behaviors, working conditions, and human traits and abilities needed to perform the job. Step 5 is to verify the job analysis information with the worker performing the job and with his or her immediate supervisor. Step 6 is to develop a job description and job specification.

94. Explain how a job analysis typically involves a joint effort by an HR specialist, the worker, and the worker’s supervisor. (moderate)

Answer: The HR specialist might observe and analyze the job and then develop a job description and specification. The supervisor and worker may fill out questionnaires listing the subordinate’s activities. The supervisor and worker may then review and verify the job analyst’s conclusions regarding the job’s activities and duties.

95. What are the advantages and disadvantages of using interviews to collect job analysis data? (moderate)

Answer: Interviews are relatively simple and quick way to collect data. Skilled interviewers can gather information that might otherwise go undiscovered. Some activities might occur only occasionally or be more informal in nature. Interviews can discover these types of activities. The interview also offers an opportunity to explain the need for a job analysis. The biggest drawback is the chance for information to be distorted either to outright falsification or honest misunderstanding.

96. Explain the advantage of using a position analysis questionnaire to analyze a job. (difficult)

Answer: The advantage of the PAQ is that it provides a quantitative score or profile of any job in terms of how that job rates on five basic activities: 1) having decision-making/ communication/ social responsibilities, 2) performing skilled activities, 3) being physically active, 4) operating vehicles/ equipment, and 5) processing information. Its real strength is in classifying jobs. Jobs can then be compared quantitatively.

97. When is a job function essential? (moderate)

Answer: A job function is essential when it is the reason the position exists or when the function is so specialized that the firm hired the person doing the job for his or her expertise or ability to perform that particular function. Essential job functions are the job duties that employees must be able to perform.

98. What job-related behaviors are considered generic and important to all jobs? (moderate)

Answer: Regardless of the job, the following work behaviors are important to all jobs: industriousness, thoroughness, schedule flexibility, attendance, off-task behavior (reverse), unruliness (reverse), theft (reverse), and drug misuse (reverse).

99. What are the five steps for establishing job specifications based on statistical analysis? (difficult)

Answer: Step 1: Analyze the job and decide how to measure job performance. Step 2: Select personal traits like finger dexterity that you believe should predict successful performance. Step 3: Test candidates for these traits. Step 4: Measure these candidates’ subsequent job performance. Step 5: Statistically analyze the relationship between the human trait and job performance.

100. Explain the difference between job enlargement and job enrichment. (easy)

Answer: Job enlargement means assigning workers additional same-level activities to increase the number of activities they perform. Job enrichment means redesigning jobs in a way that increases the opportunities for the worker to experience feelings of responsibility, achievement, growth, and recognition.

5 Readings in Management

noreply@blogger.com (On2thebadguy) — Fri, 4 Sep 2009 20:21:00 -0700

Comp Exam Review Module Six: Readings in Management

1. Evaluate whether corporations have a responsibility to society that extends beyond maximizing profit. Essay on 10.25.08 and on 11.15.08.

Three arguments that corporations do have a responsibility beyond maximizing profits

Stakeholder Theory – managers ought to serve the interests of all those who have a stake in the firm.

(Robert D. Hay and Edmund R. Gray)

Three arguments that corporations do not have a responsibility beyond maximizing profits

Shareholder Theory – managers ought to serve the interests of the firm’s owners.

(Alexei M. Marcoux)

Based on the logical assumption that a firm is a creation of society, it has a responsibility to aid in the accomplishment of society’s goals.

Social obligations of the firm should be limited to making good on contracts, obeying the law, and adhering to ordinary moral expectations because stakeholder-oriented management undermines shareholder property rights by denigrating and discouraging equity investment.

Since corporations are the source of many problems in society – pollution, corruption, discrimination, etc. – they should be required to resolve these problems.

Firms should not be obligated to give something back to those whom they routinely give so much already. They pay their employees’ wages and benefits for the labor they provide. They provide a good or service for the revenues they receive. They pay their part of taxes and obey the laws.

Organizations frequently have financial resources and, therefore, are in a position to use the money for social good and not only for increasing the power and wealth of the firm.

The corporate boardroom would be transformed from a forum in which economically rational strategies are adopted in pursuit of added value into one in which bureaucratic political maneuvering would be the order of the day.

2. Evaluate whether the corporate strategy of downsizing is unethical. Essay on 10.25.08 and on 11.08.08.

Three arguments that downsizing is unethical

(Larry Goss)

Three arguments that downsizing is not unethical

(Joseph T. Gilbert)

Downsizing violates the psychological and social contracts implicit in the employer-employee relationship since there is an implied sense of job security afforded the employee as long as he or she is productively advancing the goals of the organization.

Employees expect that all parties will honor their explicit and implicit obligations.

The RIGHTS AND DUTIES approach deals with the question of whether an employee has a legal right to his or her job.

With some few exceptions, U.S. employees do not have legal rights to keep their jobs just because they perform well or because of their status within the company.

Most organizations deteriorate in terms of predownsizing level of quality, productivity, effectiveness, conflict, low morale, loss of trust, rigidity, scapegoating.

Organizations that undergo downsizing do not appear to be better off than they were before they implemented the process.

In the JUSTICE AND FAIRNESS approach a decision to downsize can seem to be the best, or even the only one, available to save, to change, or to improve the company.

Improving the company in the marketplace is the responsibility of the manager to the shareholders.

Downsizing is purely a market-driven decision that can only capture a short-term benefit without regard for the viability of the organization in the environment in which it operates.

The short-term advantages of downsizing only benefit a very small segment of the organization.

The UTILITARIANISM approach considers that downsizing is the greater good that will come to a larger number of people, and is justified by an analysis of the whole situation.

Further justification can be found in the good for the shareholders and others who would be hurt by a company’s diminishing presence in the market place.

3. Evaluate whether diversity in the workplace is a worthwhile goal for corporations. Essay on 11.01.08 and on 11.15.08.

Three arguments that diversity is a worthwhile goal

(Nancy Lockwood)

Three arguments that diversity is not a worthwhile goal

(Roger Clegg)

Talent shortages can be addressed by actively recruiting, hiring, and training minorities and females.

Firms that intentionally discriminate are reducing the size of the talent pool from which they could recruit.

Maintaining a diverse workplace is corporate self-defense masquerading as positive public relations because failure to embrace such initiatives is likely to result in lawsuits, legal harassment, increased governmental intervention and regulations, and social and political pressure.

Diversity-embracing organizations enjoy larger market share since they will have access to a potentially larger customer base.

Over the course of time, such beneficial outcomes will translate into increased levels of employee productivity and organizational profitability.

The belief of worthwhile diversity presupposes that blacks/whites, males/females, natives/foreigners are so different in how they think and behave in the workplace that these differences justify deliberate racial and ethnic discrimination in order to ensure a racial and ethnic mix.

Diverse work groups tend to produce more decision alternatives as well as providing a wider range of creative solutions than do homogenous groups.

The additional costs – usually in terms of time and money expenditures – incurred by diverse groups trying to reach consensus can far outweigh the benefits provided by their membership diversity.

It has not been unequivocally established by research that diversity, in and of itself, results in higher levels of production.

Workplace diversity can be viewed as having both direct and indirect links to the bottom line.

Many firms support workplace diversity primarily out of fear.

4.Evaluate whether Sarbanes-Oxley is an effective way to achieve meaningful reform in corporation governance. Essay on 11.15.08.

Three arguments that the act is an effective way to achieve such reform

(Federal News Service)

Three arguments that the act is not an effective way to achieve such reform

(Alan Reynolds)

This legislation was necessary in restoring public confidence in the nation's capital markets by strengthening corporate accounting controls.

By establishing the Public Company Accounting Oversight Board, this act will ensure accounting and auditor integrity.

It is unnecessary because the SEC had ample authority to oversee, investigate, and enforce honest accounting and auditing.

This act has 11 titles with specific mandates and requirements to ensure corporate governance.

A Harris poll taken in early 2004 found that 59 percent feel the act will help protect their stock investments, while 57 percent indicate that they would be very unlikely to invest in a company that did not comply with the provisions of the act.

It is harmful because it greatly increases the costs and risks of doing business as a publicly traded U.S. corporation (higher costs of regulatory compliance, greater expenses for insurance and directors’ compensation) and increases the risks of serving as a director or officer (being overly timid, afraid to make bold investments).

The market drop is tied to a series of high-profile scandals involving corporate officials misleading investors in order to line their own pockets and some accountants looking the other way.

This legislation reflects the determination to see that the confidence of investors in our capital markets are restored. For when trust is lost, the markets falter, with serious consequences for our economy.

It is inadequate because it failed to encourage the development of institutions and incentives (including an excessive incentive to retain earnings before the individual tax on dividends was reduced) to improve corporate governance over the long haul.

The free market system relies primarily on trust and full and accurate disclosures. Those tenets had been violated.

This reform was developed because of a few bad companies. Now every company is going to feel the wrath of this legislation.

5. Evaluate whether U.S. corporations should be allowed to hire illegal aliens. Essay on 10.25.08 and on 11.08.08.

Three arguments in favor of such hiring practices

(Rob Paral)

Three arguments against this practice

(Fred Dickey)

Research has established that immigrants and natives frequently do not compete for the same jobs. In areas where demand for labor is high relative to supply, hiring immigrants results in a complementary outcome rather than a competitive situation.

Illegal aliens are willing to do the jobs that natives are not willing to do.

The United States has long depended on immigrants (legal and illegal) to compensate for shortfalls in the native-born labor force.

Because illegal aliens have no bargaining power, the wages for the unskilled jobs are driven down.

Their presence makes our own poor more destitute, creating Third World chaos in the economy.

Firms that hire illegal aliens are effectively displacing legitimate American employees.

Many employers have found that there is a large degree of overlap between the characteristics of an individual willing to accept the risks and dangers of relocating to a foreign land in order to make a better life for himself and the characteristics of a loyal, dependable, and driven employee.

Allowing corporations to hire illegal aliens is forcing the otherwise honest businesses to do as the illegal’s do (cash only, hiring of illegals) so they themselves can compete for and stay in business thereby compounding the problem.

Illegal aliens contribute to our economy in ways beyond their physical labor; as a group, they contribute billions of dollars to Social Security through payroll taxes. However, owing to fears of being caught and deported, few actually collect payments, thus providing Social Security program with a huge net gain.

Illegal immigration has a negative impact on the economy particularly in the area of taxes. State lose billions of dollars each year in the form of unpaid taxes while they are faced with growing demands for governmental services driven by the increase in their populations, much of which is the result of illegal immigration.

States have to raise taxes to meet these needs; thus, the law-abiding American citizens foot the bill for the illegal immigrants.

Title: How does E-commerce help business entities achieve operational excellence?

noreply@blogger.com (On2thebadguy) — Wed, 2 Sep 2009 20:44:00 -0700

Nowadays almost everything is done through the use of the Internet. Paying bills and buying music or software are just a few of the many things people do online. Businesses sell goods or services and use the Internet for advertisement purposes as well. In this era of online technological abundance it is interesting to figure out the different ways on how business entities do their business transactions online. This mini project will take a closer look in to e-commerce and related issues including internet technology, digital goods and marketing. Thus these following areas will be focused on. The main purpose of the report is to answer the problem formulation and make the necessary conclusions in the end. In order to answer the problem at hand; related statistics, theories from IT- strategy and some online research are necessary and will be the main sources of information.
Electronic commerce, e-commerce or eCommerce by definition means the sale and purchase of goods and services over the Web and the Internet . It involves commercial transactions between organizations and individuals using digitally, Internet- enabled platforms or devices. There are 3 types of E-commerce; B2C, B2B and C2C. The following types will be discussed in detail further below.
Business-to-consumer targets retailing products/services to individual customers normally by using catalogue utilizing shopping cart software. Some examples of B2C sites are H&M.com, pixmania.com, Ellos.dk, and veromoda.com.
Business-to-business is where companies transact or do business with each other. Manufacturers selling to distributors, wholesalers selling to retailers are some of the possible sequences in B2B. Pricing is often negotiated and in terms of quantity. Examples of B2B sites are; ChemConnect, Dell, Microsoft, Oracle, SpaceWorks, Trade Compass and many others.
Consumer-to-consumer means online users can transact and do business with other online users of a particular site. Free classified ads, forums, auctions and links make it possible for users to transact with each other online. Due to the invention of security payment systems i.e. PayPal it became a lot easier and more secure to handle money transactions through the Internet. One popular example is eBay; an online auction site where users bid on products and consumers sell their products to other users.
Another concept concerning Internet-enabled devices is mobile commerce. Almost most of handheld, wireless mobile devices have Internet access. Considering this, one can transact and purchase products/services with the use of these devices. M-commerce will not be focused on .
7 unique features of E-commerceThere are 7 unique features of E-commerce namely; ubiquity, global reach, universal standards, richness, interactivity, information density and personalization or customization. The following features are to be discussed further below.
E-commerce is considered to be ubiquitous, meaning it can be used everywhere and is universal. You can do it at home, at work or even when you’re on vacation as long as you have a digitally enable device such as a computer or a palm pilot where you can connect to the Internet. One important advantage is it lessens transaction costs where in traditional commerce you have to go to a physical retail place such as a shop to buy goods. This creates a “marketspace ” for commercial transactions. Customer convenience is also enhanced.
Using technology like the Internet can be a big advantage. First it can be used globally, anywhere and by everyone so there are no specific boundaries. Potential customers are to be considered the worldwide population who uses online devices. That means it can be the entire world so it is a huge market.
There is one universal standard when dealing with E-commerce. It is usually done over the Internet so the technical standard applying is Internet standards. Internet standards are universal meaning it can be accessed anywhere in the world using the same standards. It lowers market entry costs, the amount paid by sellers to bring their goods out in the market. By using E-commerce they can easily sell or advertise their goods or services without spending a large amount of money compared to traditional commerce. It also reduces search costs, the effort and amount of time consumers use to search for particular goods.
The richness of messages over online and digital media can be in different context and can be complex. An advantage of traditional commerce is that they are able to provide richness when selling products or services with the use of personal, face to face techniques and visual auras done by the sales representatives. E-commerce on the other hand uses rich audio, text and video messages sent over the Web.
Interactivity is one important feature with E-commerce. 2 way communication is encouraged between the customer and the merchant i.e. E-commerce website. Compared to traditional commerce, E-commerce offers more participation on the side of the customer. It is possible to get customer information, ask product questions, edit specific orders etc.
Information density is increased with the use of E-commerce. This means the information customers and online merchants get are in bigger amounts and better quality. It reduces information costs because you can get specific information online with less time and effort. Consumers get a bigger price transparency; it means consumers can get specific prices for a market. They also get a bigger cost transparency, where they get the actual prices merchants paid for the products. Merchants have a big advantage because they can get larger amounts of customer information compared before. They can practice price discrimination and target specific customer segments where they can sell nearly the same goods/services at different price levels.
Personalization can be easily done with E-commerce. By using customer information, a business can create marketing strategies focused on specific target groups. In that way, the customers get a personalized marketing profile, designed to suit their needs. One important goal in marketing is to deliver value to customers, convincing them that a product or service will satisfy their needs. Customization is also possible with E-commerce. Delivered products/services can be changed according to customer preferences and past purchases. A person can choose to read which online news article he wants to read first and this is possible by selecting it on the website. Another way is to have a profile on a specific site; based on the information from the profile a company can send certain event messages that suit your interests or preferences.
Internet TechnologyInternet by definition means a worldwide system of interconnected computer networks using the TCP/IP protocol . It is a global data communications system while the Web is one of the services that can be used in the Internet. Some common uses for the Internet are; E-mail, Web, remote access, collaboration, file sharing, streaming media etc.
Looking at table 1 the total worldwide usage of the Internet is around 1,463, 632, 361 billion (estimated on June 30, 2008) done by the International Telecommunications Union. The biggest users seen here is in the Asian region and the lowest is in the Oceania/Australian region. These numbers are also depending on the size of population.
Internet Business ModelsDue to the Internet traditional business models have been affected. New business models emerged and some traditional value chain channels are either put aside or updated. Nowadays information can be easily obtained from anywhere and the cost of creating; sending and storing it are reduced. Companies, in one way or another, use the Internet to add extra value to their existing products/services and provide the foundation for new ones to create profit. Some of the most important internet business models are the following; virtual storefront, information broker, online marketplace, content provider, online service provider, virtual community and portal. It will be explained further below.
Virtual storefront is where the physical products are sold directly to consumers or businesses. It can be called the “direct model” because businesses or manufacturers use one of the most important channels which is namely the Internet to directly sell products/services to customers. In this way, they compress the distribution channels and reduce search cost. Personalization or customization is also focused on because customers can choose which products to buy and the design or substance of the finished product. Some examples are dell computers and amazon.com.
Information broker is where customer information i.e. their consumption habits are being analyzed and studied. Product and producer information are also useful to customers interested in purchasing a product. Some companies function as information intermediaries assisting buyers and sellers to understand a specific market. Companies using the information broker model generate revenue by directing buyers to sellers. Examples are Edmunds.com, Realtor.com, advertising networks and research agencies.
Transaction broker is where online sales transactions are processed and a fee is generated in every transaction. It also provides third-party services to buyers and sellers settling the payment process. Examples are PayPal, Escrow and Expedia.comOnline marketplace is where buyers and sellers can negotiate, transact, and fulfill transactions for products/services. It also includes online and reverse auctions. Reverse auctions means that the buyer sends out bids to different sellers to sell with a specified price. This model is both for consumer and businesses and generates transaction fees. Examples are eBay.com, GoIndustry, Priceline.com, ChemConnect.com and dba.dk.
Content provider is where digital products/ services i.e. music, movies, news, photos and videos are offered and sold over the Web. Users are normally charged a service or transaction fee. Subscriptions and advertising models are combined and used in this model. Examples are Netflix.com, iTunes.com and Games.com.
Online service provider offer network connectivity and other online services. This model generates revenue through subscriptions, transactions fee or collecting customer information and by using advertising tools. Examples are America Online, Streamload.com and Xdrive.comVirtual community is a model where people can meet and interact in an online space. People with similar interests can share ideas and find information. Social networking sites are one type of online communities and have become popular through time. Social networking means extending your social contacts and network and these includes friends, job colleagues, family and others. This is done by signing up for a networking site, making a profile and adding people you know or a new friend. You then browse a lot of profiles in order to get in touch with someone. There are networking sites focusing on extending your social network like your friends and others focusing on your job network like your colleagues. This model generates revenue through advertising tools such as banner ads, pop-ads, links and subscription or transaction fees. Examples are Friendster.com, MySpace.com, Facebook.com, Flickr, LinkedIn.com and YouTube.com. Social shopping is a type of e-commerce where users of an online community get to share shopping ideas and help other users on their shopping lists. It is similar to a networking site although focusing on shopping for particular products. Examples are Kaboodle, StyleHive.com and stylefeeder.com.
Portals are normally search engines, although not all are, and it contains varied information and services. It offers a connection of links within a site. Personalization is possible with a portal, although user registration is necessary in most cases. This model generates profit by encouraging a high level of user traffic in the site using advertising tools. One example is Google, which generates profit by using different online advertising tools like click ad, adwords, adsense and many more. By far, it is considered to be the biggest search engine in the world. Other examples are Yahoo.com and MSN.com.
Using E-commerce technology is one remarkable way of doing efficient business transactions. Technologies nowadays are evolving and through time doing business transactions will be one button click away. Two interesting concepts namely; digital marketing and digital goods will be discussed in this section of the report.
Through the use of Internet, doing E-commerce has opened a lot of possibilities for businesses. More communication channels have been discovered and interaction with consumers is easily done. Merchants gained huge advantages especially with targeting marketing strategies. It is now possible to target millions of potential users and making products in accordance to their own individual preferences. In this way, customer satisfaction is increased thus value is delivered to the particular product. In traditional marketing, creating and delivering value is the most important aim to give consumers. If value is delivered, the customer will think more of the company and customer loyalty is introduced.
Digital marketing by definition is the practice of promoting products and services using digital distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner . Although communication channels under Internet marketing are used, digital marketing goes beyond that by using digital-enabled devices or platforms that does not require Internet access to be used. Some examples of such devices include; mobile phones, palm pilots, sms/mms, display/banner ads and other digital devices. It is still considered to be a channel for direct marketing, using the same communication methods but in a digital fashion. One key concept under digital marketing is gathering of consumer information. Digital or internet based tools are efficient ways on analyzing and getting consumer information. Consumer behavior especially when purchasing specific products are vital for marketing. It gives the marketing manager an idea on what products to market, advertising tools to use and the marketing strategy to choose in connection to specific target groups. Some examples of tools used in gathering and analyzing consumer information are; clickstream tracking tools, collaborative filtering, blogs, shopping information tools etc.
With the abundance of E-commerce and the use of digital marketing, sales of digital goods is increasing. Digital goods are any goods that are delivered, purchased, stored and used in its electronic format. It is normally shipped or delivered electronically through E-mail or a link to download the product from a particular site is given. Merchants can decide price discrimination due to low menu and delivery cost over the Internet. Some examples of digital goods are; e-books, music files, software, digital images, website templates, manuals in electronic format, video, newspapers, magazines and others. E-commerce technology helps business entities with their business transactions in many ways. First, you can use e-commerce under B2C, B2B and C2C markets. Considering these businesses can target different markets thus expanding their potential target segments. Most businesses nowadays use E-commerce and the Internet to do commercial transactions because it is more effective and cost reducing. Sales of Retail E-commerce have been increasing through time and are expected to increase in the future.
There are different features of E-commerce that encourages operational excellence and a higher customer satisfaction. E-commerce is ubiquitous meaning it can be used everywhere as long as you have an Internet / digitally-enabled device. There is no need for a physical retail shop and transactions costs are reduced. It can be used anywhere and by everyone so there are no specific boundaries. This includes the global population that uses online and digital devices. There is one universal standard used and that is Internet standards. It lowers market entry costs and search costs. The richness of messages sent through E-commerce technology can be varied using rich audio, text and video messages sent over the Web. Two way-communication between the consumer and merchant is encouraged and interactivity through the site is highly appreciated. Information density is increased meaning the information from consumers and online merchants are in bigger amounts. Information costs are decreased. Consumers get a bigger price and cost transparency while merchants can practice price discrimination. Personalization can be easily done basing on customer information gathered by a business entity focusing on creating marketing strategies on specific target groups. Customization is another important feature because consumers can change delivered products/services in accordance to their own preferences. Considering these features, it is easier and faster to do business transactions between consumers and online merchants thus improving operational excellence. Due to a more advanced customer information gathering or analysis, businesses gain advantages in targeting specific marketing strategies in relation to an individual´s specific preference or behavior. By doing these, they can practice more advertising, and sell products/ services at the same time satisfying consumers and developing customer loyalty to the company.
Internet has played a vital role in today´s marketing and business markets. Because of the ongoing use of it, traditional business models are affected and new business models emerged. Some of the most popular models are portals, social networking sites and auctions. Digital marketing includes the use of internet marketing tools plus the addition of digitally-enabled devices. Digital goods are goods that are delivered, purchased and used in its electronic format.
Literature ListK.C. and J.P.Laudon, Management Information Systems, Managing the digital firm, 10th edition, Pearson Prentice Hall.
Linkswww.google.comwww.wikipedia.comwww.census.gov.comwww.businessdictionary.comwww.answers.comwww.internetworldstats.comwww.webopedia.com

Online Marketing

noreply@blogger.com (On2thebadguy) — Wed, 2 Sep 2009 20:28:00 -0700

1.Executive Summary
Customers benefit from online marketing in many ways. It is interactive, immediate and provides access to an abundance of comparative information about products, companies and competitors. Marketers also benefits from online marketing. For them, it helps consumer relationship building, reduces costs, increases efficiency, provides more flexibility and is in the form of the Internet, a global medium that enables buyers and sellers in different countries to interact with each other in seconds. Marketers can conduct online marketing by creating an electronic storefront; placing ads online, participating in Internet forums, newsgroup or using online e-mail or webcasting. However, there remains a potential for customer abuse, ranging from irritation and unfair practices to deception and fraud. In addition, there have been growing concerns about invasion of privacy, perhaps the most difficult public policy issue currently facing the online marketing industry.
2.Conducting online Marketing
Online Marketing has evolved through three stages. In the first stage, Web sites published the same information to all customers, who received material by clicking on links. In the second stage, firms and consumers began using the Net as an outlet to actually buy and sell products and services. In the third stage, which is till evolving, it is becoming the ultimate manifestation of marketing concept through customization and personalization of products and services to satisfy individual customer needs. Marketers can conduct online marketing in four ways as follows:
a.Creating an Electronic Online Presence
A company can establish an electronic online presence through buying space on a commercial online service or establishing its own Web site. Buying a location on a commercial online service involves either renting storage space on the online service's computer or establishing a link from the company's own computer to the online service's shopping mall. JCPenney and Eddie Bauer, for example, has links to America Online, Microsoft Network and Prodigy gaining access to the millions of consumers who subscribe to these services.
Figure 1. JCPenney and Eddie Bauer has linked to America Online
The online services typically design the storefront for the company and introduce it to their subscribers. For these services, the company pays the online service an annual fee plus a small percentage of the company's online sales.
In addition to buying a location on an online service, or as an alternative, most companies have now created their own Web sites. These sites vary greatly in purpose and content. The most basic type is a corporate Web site. These sites are designed to build customer goodwill and to supplement other sales channels rather than to sell the company's products directly. For example, you can't buy ice cream at www.benjerrys.com., but you can learn all about Ben & Jerry's company philosophy, products and locations; send a free E-card to a friend or subscribe to the Chunk Mail newsletter; and while away time in the Fun Stuff area, playing "Ask Habeeni" or "The Phish Game".
Figure 2. Web site of "Ben & Jerry"
Corporate Web sites typically offer a rich variety of information and other features in an effort to answer customer questions, build closer customer relationships and generate excitement about the company. They generally provide information about the company's history, its mission and philosophy, and the products and services that it offers. They might also tell about current eve4nts, company personnel, financial performance and employment opportunities. Most corporate Web sites also provide entertainment features to attract and hold visitors. Finally, the site might also provide opportunities for customers to ask question or make comments through e-mail before leaving the site.
Other companies create a marketing Web site. These sites are designed to engage consumers in an interaction that will move them closer to a purchase or other marketing outcome. Such a site might include a catalog, shopping tips and promotional features such as coupons, sales events or contests. Companies aggressively promote their marketing Web sites in print and broadcast advertising and through "banner-to-site" ads that pop up on other Web sites. Consumers can find a Web site for buying almost anything.
Toyota operates a marketing Web site at www.toyota.com. Once a potential customer clicks in, the car marker wastes no time trying to turn the inquiry into a sale. The site offers plenty of entertainment and useful information, from cross-country trip guides and tips for driving with kinds to events such as Golf Skills Challenge and a Bike Express. But the site is also loaded with more serious selling features, such as detailed descriptions of current Toyota models and information on dealer locations and services, complete with maps and dealer Web links. Visitors who want to go further can use the Shop@Toyota feature to choose a Toyota, select equipment and price it, then contact a dealer and even apply for credit. Or they fill out an online order form for brochures and a free, interactive CD-ROM that shows off the features of Toyota models. The chances are good that before the CD-ROM arrives, a local dealer will call to invite the prospect in for a test drive. Toyota's Web site has now replaced its 800 number as the number-one source of customer leads.
Figure 3. Customer can choose a Toyota through "Shop@Toyota"
Business-to-business marketers also make good use of marketing Web sites. For example, FedEx's Web site www.fedex.com allows customers to schedule their own shipments, request a courier and track their packages in transit.
Figure 4. FedEx's Web allows customers to track packages in transit
Creating a Web site is one thing, getting people to visit the site is another. The key is to create enough value and excitement to get consumers to come to the site, stick around and come back again. This means that companies must constantly update their sites to keep them fresh and exciting. Doing so involves time and expenses, but the expense is necessary if the online marketers spend heavily on good old-fashioned advertising and other offline marketing avenues to attract visitors to their sites.
For some types of products, attracting visitors is easy. Consumers buying new cars, computers or financial services will be open to information and marketing initiatives from sellers. Marketers of lower-involvement products, however, may face a difficult challenge in attracting Web site visitors. For low-interest products, the company should create a corporate Web site to answer customer questions and build goodwill, using it only to supplement selling efforts through other channels.
b.Placing Advertisements Online
Companies can use online advertising to build their Internet brands or to attract visitors to their Web sites. Each ad has a title or subject line. Unlike with newspaper ads, readers can't see all the text of an online classified as they browse the section; your ad title must prompt them to open up your ad and read on. Online ads pop up while Internet users are surfing online services or Web sites. Such ads include banner ads, pop-up windows, banners that move across the screen and full-screen ads that users must pass through to get to other screens they wish to view.
Companies spent almost $2 million on Web advertising in 1998, and spending is expected to increase to almost $8.9 billion by 2002. Still, this represents only a tiny fraction of overall advertising media expenditures when compared with the more than $40 billion each spent for advertising in newspaper and on broadcast television. Many marketers still question the value of Internet advertising as an effective tool. Costs are reasonable compared with those of other advertising media and some Web advertising can even attract more than millions of "hits" per week. However, Web surfers can easily ignore these banner ads and often do. Moreover, the industry has yet to come up with good measures of Web advertising impact - of who clicks on Web ads and how the ads affect them. Thus, although many firms are experimenting with Web advertising, it still plays only a minor role in their promotion mixes.
c.Participating in Forums, Newsgroup and Web Communities
Companies may decide to participate in or sponsor Internet forums, newsgroups, and bulletin boards that appeal to specific special-interest groups. Such activities may be organized fro commercial or noncommercial purposes.
(i)Forums
Forums also called special interest groups or roundtables. They are discussion groups located on commercial online services. A forum may operate libraries, a "chat room" for real-time message exchanges, and even a classified ad director. Chat sessions are online conferences in which several people can be connected and exchange text messages at once. For example, America Online boasts some 14,000 chat rooms, which account for a third of its members' online time. It also provides "buddy lists", which alert members when friends are online, allowing them to exchange instant messages. Most forums are sponsored by special-interest groups. Thus, as a major musical instruments manufacturer, Yamaha might start a forum on classical music. On most forums, direct advertising is prohibited. Forum participants are asked to put their promotional messages in a library where other members can view it, rather than posting it to a discussion or message board. Forums may ban indiscriminate advertising, but they're an excellent way to build public awareness of your company and give you invaluable feedback and competitive intelligence.
(ii)Newsgroups
Newsgroups are the Internet version of forums. However, such groups are limited to people posting and reading messages on a specified topic, rather than managing libraries or conferencing. Internet users can participate in newsgroups without subscribing. There are thousands of newsgroups dealing with every imaginable topic, from healthful eating and caring for your Bonsai tree to collecting antique cars or exchanging views on the latest soap opera happenings. Participating in newsgroup is an easy way to focus on a group of people with a particular interest. The company can find out what they're saying about the subject in general, what problems or needs they have, what they're saying about the competition, and even what they're saying about the company. A market research about new products or promotions can be conducted thereon, and the company can offer information online that will help to build up reputation and will ultimately bring customers to the company.
(iii)Bulletin Boards Systems (BBS)
Compared with the Net and online services, Bulletin boards systems are very small slices of the online marketplace. BBS are specialized online services that center on a specific topic or group. There are over 60,000 BBS originating in the United States, dealing with topics such as vacations, health, computer games and real estate. Marketers might want to identify and participate in newsgroups and BBS that attract subscribers who fit their target markets. However, those users often resent commercial intrusions on their Net space, so the marketer must tread carefully, participating in subtle ways that provide real value to participants.
(iv)Web communities
The popularity of forums and newsgroups has resulted in a rash of commercially sponsored Web sites called Web communities. Such sites allow members to congregate online and exchange views on issues of common interest. They are the cyberspace equivalent to a Starbucks coffeehouse, a place where everybody knows your e-mail address.
Visitors to these Internet neighborhoods develop a strong sense of community. Such communities are attractive to advertisers because they draw consumers with common interests and well-defined demographics. For example, Parent Soup provides and ideal environment for the Web ads of Johnson & Johnson, Gerber's, Wal-Mart and other companies targeting family audiences. Moreover, cyber hood consumers visit frequently and stay online longer, increasing the chance of meaningful exposure to the advertiser's message.
Web communities can be either social or work related. One successful work related community is Agriculture Online. This site offers commodity prices, recent farm news, and chat rooms of all types. Agriculture Online has been highly successful, attracting as many as 5 million hits per month.
d.Using E-mail and Webcasting
(i)Electronic Mail (E-mail)
A company can encourage prospects and customers to send questions, suggestions and even complaints to the company via e-mail. Customer service representatives can quickly respond to such messages. The company may also develop Internet-based electronic mailing lists of customers or prospects. Such lists provide an excellent opportunity to introduce the company and its offerings to new customers and to build ongoing relationships with current ones. Using the lists, online marketers can send out customer newsletters, special product or promotion offers based on customer purchasing histories, reminders of service requirements or warranty renewals or announcements of special events.
(ii)Web-casting
Companies can also sign on with any of a number of "Webcasting" services, such as PointCast and Ifusion, which automatically download customized information to recipients' PCs. For a monthly fee, subscribers to these services can specify the channels they want, such as news, company information, entertainment and others and the topics they're interested in. Then, rather than spending hours scouring the Internet, they can sit back while the Webcaster automatically delivers information of interest to their desktops.
Webcasting, also known as "push" programming, affords an attractive channel through which online marketers can deliver their Internet advertising or other information content. The major commercial online services are also beginning to offer Webcasting to their members. For example, America Online offers a feature called Driveway that will fetch information, Web pages and e-mail based on members' preferences and automatically delivers it to their PCs.
As with other types of online marketing, companies must be careful that they don't cause resentment among Internet users who are already overloaded with "junk e-mail". Companies must beware of irritating consumers by sending unwanted e-mail to promote their products. Netiquette, the unwritten rules that guide Internet etiquette, suggests that marketers should ask customers for permission to e-mail marketing pitches, and tell recipients how to stop the flow of e-mail promotions at any time. This approach, known as permission-based marketing, is emerging as a new model for e-mail marketing.
3. Promise of Online Marketing
Online marketing offers great promise for the future. Its most enthusiastic apostles envision a time when the Internet and e-commerce will replace magazines, newspapers and even stores as sources of information and buying. Online marketing will bring changes to various sectors of economy. Consumers' ability to order direct will seriously hurt certain groups, particularly travel agents, stockbrokers, car dealers and bookstore owners. Middlemen will be disintermediated by online services in some extent, and help consumers shop more easily and obtain lower prices.
Yet despite all the publicity and promise, online marketing may be years away from realizing its full potential. Even then, it is unlikely to fulfill such sweeping predictions. To be sure, online marketing will become a full and complete business model for some companies, Internet firms such as Amazon.com, eBay, Yahoo!, and Netscape, and direct-marketing companies such as Dell Computer. Michael Dell's goal is one day "to have all customers conduct all transactions on the Internet, globally". But for most companies, online marketing will remain just one important approach to the marketplace that works alongside other approaches in a fully integrated marketing mix.
4.Challenges for the Online Marketing
While online marketers enjoy many positive indicators for sustained growth and success, it is essential to recognize and deal with several threats to the industry. Following are some of the challenges that online marketers face:
a.Limited consumer exposure and buying
Although expanding rapidly, online marketing still reaches only a limited market space. Moreover, many Web users do more window browsing than actual buying. Once source estimates that although 65% of current Internet users have used the Web to check out products and compare prices prior to a purchase decision, only 14% of Internet users have actually purchased anything online.
b.Skewed user demographics and psychographics
Although the Web audience is becoming more mainstream, online users still tend to be more upscale and technically oriented than the general population. This makes online marketing ideal for marketing computer hardware and software, consumer electronics, financial services and certain other classes of products. However, it makes online marketing less effective for selling mainstream products.
c.Chaos and Clutter
The Internet offers millions of Websites and a staggering volume of information. Thus, navigating the Internet can be frustrating, confusing and time-consuming for consumers. In this chaotic and cluttered environment, many Web ads and sites go unnoticed or unopened. Even when noticed, marketers will find it difficult to hold consumer attention.
d.Security
Consumers still worry that unprincipled snoopers will eavesdrop on their online transactions or intercept their credit card numbers and make unauthorized purchases. In turn, companies doing business online fear that others will use the Internet to invade their computer systems for the purposes of commercial espionage or even sabotage. Online marketers are developing solution to such security problems. However, there appears to be an ongoing competition between the technology of Internet security systems and the sophistication of those seeking to break them.
e.Ethical concerns
Privacy is a primary concern. Marketers can easily track Web site visitors and many consumers who participate in Web site activities provide extensive personal information. This may leave consumers open to information abuse if companies make unauthorized use of the information in marketing their products or exchanging electronic lists with other companies. There are also concerns about segmentation and discrimination. The Internet currently serves upscale consumers well. However, poorer consumers have less access to the Internet, leaving them increasingly less informed about products, services and prices.
Despite these challenges, companies large and small are quickly integrating online marketing into their marketing mixes. As it continues to grow, online marketing will prove to be a powerful tool for building customer relationships, improving sales, communicating company and product information delivering products and services more efficiently and effectively.
5.Public policy and Ethical issues on Direct marketing
Direct marketers and their customers usually enjoy mutually rewarding relationships. Occasionally, however, a darker side emerges. The aggressive and sometimes shady tactics of a few direct marketers can bother or harm consumers, giving the entire industry a black eye. Abuses range from simple excess that irritate consumers to instances of unfair practices or even outright deception and fraud. During the past few years, the direct-marketing industry has also faced growing concerns about invasion of privacy issues.
a.Irritation, unfairness, Deception and Fraud
Direct-marketing excesses sometimes annoy or offend consumers. Most of us dislike direct-response TV commercials that are too loud, too long and too insistent. Especially bothersome are dinnertime or late-night phone calls. Beyond irritating consumers, some direct marketers have been accused of taking unfair advantage of impulsive or less sophisticated buyers. TV shopping shows and program-long "infomercials" seem to be the worst culprits. They feature smooth-talking hosts, elaborately staged demonstrations, claims of drastic price reductions, "while they last" time limitations, and unequaled ease of purchase to inflame buyers who have low sales resistance.
Worse yet, so-called heat merchants design mailer and write copy intended to mislead buyers. Political fun-raisers, among the worst offenders, sometimes use gimmicks such as "look-alike" envelopes that resemble official documents, simulated newspaper clippings and fake honors and awards. Other direct marketers pretend to be conducting research surveys when they are actually asking leading questions to screen or persuade consumers. Fraudulent schemes, such as investment scrams or phony collections for charity, have also multiplied in recent years. Crooked direct marketers can be hard to catch: Direct-marketing customers often respond quickly, do not interact personally with the seller, and usually expect to wait for delivery. By the time buyers realize that they have been bilked, the thieves are usually somewhere else plotting new schemes.
In recent years, governments have considered imposing a number of restrictions on online marketing methods, and taxes on online marketing sales. Most concerned direct marketers work diligently on intelligent self-regulation in concert with the Direct Marketing Association and regional associations and clubs. In addition, these associations expend considerable effort and money in educating legislators, regulators, and consumers about the benefits of direct marketing and its positive impact on economic development.
b.Invasion of Privacy
Invasion of privacy is perhaps the toughest public issue now confronting the direct-marketing industry. These days, it seems that almost every time consumers enter a sweepstakes, apply for a credit card, take out a magazine subscription or order products by mail, telephone or the Internet, their names are entered into some company's already bulging database. Using sophisticated computer technologies, direct marketers can use these databases to "micro target" their selling efforts.
Consumers often benefit from such database marketing; they receive more offers that are closely matched to their interests. However, many critics worry that marketers may know too much about consumers' lives and that they may use this knowledge to take unfair advantage of consumers. At some point, they claim, the extensive use of databases intrudes on consumer privacy.
For example, they ask, should AT&T be allowed to sell marketers the names of customers who frequently call the 800 numbers of catalog companies? Should a company like American Express be allowed to make data on its 175 million American cardholders available to merchants who accept AmEx cards? Is it right for credit bureaus to compile and sell lists of people who have recently applied for credit cards - people who are considered prime direct-marketing targets because of their spending behavior? Or is it right for states to sell the names and addresses of driver's license holders, along with height, weight and gender information, allowing apparel retailers to target tall or overweight people with special clothing offers?
In their drives to build databases, companies sometimes get carried away. For example, when first introduced, Intel's new Pentium III chip contained an imbedded serial number that allowed the company to trace users' equipment. When privacy advocates screamed, Intel disabled the feature. Similarly, Microsoft caused substantial privacy concerns when it introduced its Windows 95 software. It used a "Registration Wizard", which allowed users to register their new software online.
However, when users went online to register, without their knowledge, Microsoft took the opportunity to 'read' the configurations of their PCs. Thus, the company gained instant knowledge of the major software products running on each customer's system. When users learned of this invasion, they protested loudly and Microsoft abandoned the practice. Such actions have spawned a quiet but determined 'privacy revolt' among consumers and public policy makers.
The direct-marketing industry is addressing issues of ethics and public policy. For example, the Direct Marketing Association, the largest association for business interested in interactive and database marketing with more than 4,600 member companies recently developed its "Privacy Promise to American Consumers". This initiative, an effort to build consumer confidence in shopping direct, requires that all members adhere to a carefully developed set of consumer privacy rules. The Privacy Promise requires that members notify customers when any personal information is rented, sold or exchanged with others. Members must also honor consumer requests not to receive mail, telephone or other solicitations again.
Figure 5. The DMA developed its "Privacy Promise to Customers"
Direct marketers know that, left untended, such problems will lead to increasingly negative consumer attitudes, lower response rates and calls for more restrictive legislation. More importantly, most direct marketers want the same things that consumer want: honest and well-designed marketing offers targeted only toward consumers who will appreciate and respond to them. Direct marketing is just too expensive to waste on consumers who don't it.
REFERENCES
Philip Kotler (2000) 'Marketing Management', The Millennium Edition, Prentice Hall, pp 651 - 673
Jay Conrad Levinson & Charles Rubin (1995) 'Guerrilla Marketing Online', Hughton Mifflin Company, pp 33 - 53
Philip Kotler & Gary Armstrong (2001) 'Principles of Marketing', 9th Edition, Prentice Hall, pp 639 - 651
Jones, Susan K. (1998) 'Creative Strategy in Direct Marketing' NTC Contemporary
Toyota http://www.toyota.com/
FedEx http://www.fedex.com/
The Direct Marketing Association http://www.the-dma.org/

A Case For Internet Marketing

noreply@blogger.com (On2thebadguy) — Wed, 2 Sep 2009 20:28:00 -0700

As companies strive to use the internet to reach customers in a global market, online advertising has become a popular way for firms to reach their audience. Online advertising is the most dynamic, inexpensive, and easiest way to reach a target market. It is less costly than print publication; it is more targeted than television or radio broadcasts, and has more availability than place-based media. Online advertising can provide a unique dynamic of scalability, desirable demographics, cost-effectiveness, and unmatched tracking capabilities. While some people get annoyed with the persistence of pop-up ads, flamboyant blinking banners and always irritating spam e-mail, the dirty truth is that these techniques are functional ways of delivering a message to the consumer. With more and more people logging on to the internet worldwide the more people web advertising will reach.
The benefits of online advertising far exceed that of traditional print publication through costs, availability, wider consumer markets, and the potential for increased profit margins. Considering that traditional print methods and distribution are tried and true, the technological trends of the internet surpass it at each level of the marketing process. To better understand the differences, some clarity in the two advertising mediums must be identified. Traditional print advertising is composed mostly of brochures, pamphlets, newspaper advertisements, and business cards. In print publication hefty expenses are incurred through printing fees, storage facilities to house boxes and bundles of material, the distribution costs, costs of labor to compile the marketing material, transportation to deliver the quantities of print material, and of course, the postage itself. The cost of sending just one promotion or campaign for “fifteen-percent off, this week only,” can become astronomical. In contrast Internet advertising uses no raw materials. They are developed, delivered and received virtually on a web page or an electronic storefront for a fraction of the cost of traditional print publication advertising. while the initial startup costs of an Internet website may be at times comparable to that of a one-time promotion in traditional print media, the costs are considerably lower for the following reasons; there is no postage to affix, no expense bared for storage, delivery, or repeated design fees for each new promotion. The Internet website is reusable, recyclable, and rarely falls into redundancy with outdated material. Monthly fees are minimal for site hosting. In addition if an error is found in a traditionally printed promotion, it may incur nearly all of the costs to be paid, yet a second time, even for something as simple proofreader’s oversight. When considering the advantages of Internet-based advertising, the error modification incurs little to no costs to repair typographical errors and wrong promotion dates. In fact the change can be made at a moments notice.
Television and radio advertising has become the choice advertising media for many firms While the idea of reaching a mass audience through a television or radio broadcast might be appealing to some firms. It’s targeting of the market attempted to be reached is limited. While a firm may be able to reach a large audience in an approximate age group or interest by advertising during a specific program it cannot compare to the ability for internet advertising to target a market so specifically as someone searching the internet, for example, for specific auto parts. Internet advertising offers some targeting methods that insure that those who see your ads are the ones most likely to buy. Programs like Google’s Adwords and Adsense match up advertisers with content that their target market browses regularly. Forget the costly repetitive strategy of television and radio advertisements; internet advertising is more specifically targeted. Additionally, with the growing use of digital video recorders such as Tivo and DirecTV DVR people are skipping right over the advertisements, and television commercials are reaching less and less people. Again when you way the costs of the two options, internet advertising is a fraction of the cost of a thirty second spot on primetime television.
Place-based advertising is most affective for captive audiences in public places like in a city bus or on an airplane. A person has no choice but to look around and see the announcement, the problem of course is that this type of placement doesn’t reach a large enough audience, and that audience doesn’t spend all that much time in the place where the ad is located, so the may miss it. With internet usage on the rise it has recently edged out even television consumption in hours viewed. According to a recent study by the Stanford Institute for the Quantitative Study of Society, the researchers found the average internet user spends three hours per day online. Almost double that of the average respondent spends watching television. With the time users spend online they are similar to traditional captive audiences and are subject to three hours of advertisements.
With all the success and benefits for firms for advertising over the internet there are some downfalls. People often have strong negative reactions to advertisements during their internet browsing experience whether they're visiting the main portals such as Yahoo or MSN, local newspapers, or even tiny personal sites. Advertisements are seemingly everywhere on the internet and they can display themselves in a variety of ways. The following is a list of specific design elements that online advertisers use and the percentage of respondents that had a negative or very negative reaction to them.
Design ElementUsers Answering"Very Negatively"or "Negatively"Pops-up in front of your window95%Loads slowly94%Tries to trick you into clicking on it94%Does not have a "Close" button93%Covers what you are trying to see93%Doesn't say what it is for92%Moves content around92%Occupies most of the page90%Courtesy: http://www.useit.com/alertbox/20041206.htmlAccording to the table above, the most unsavory advertisement is the pop-up. This finding is in line with the rise in popularity of pop-up blockers. Pop-up blockers have caused a similar problem in what digital video recorders have caused for television commercials. Users not only dislike pop-ups, they transfer their dislike to the advertisers behind the ad and to the website that exposed them to it. Thankfully for the online advertiser there are many different ways to get the message across that are not as negatively received. Advertisements that were well received included promotions that were related to what they were doing online and that will indicate what will happen if people click on them. Websites that follow the unwritten usability guidelines: make the users' options clear, speak plainly, and provide the information users want, are more positively received and most likely to be successful.
In conclusion online advertising is the most dynamic, inexpensive, and easiest way to reach a firms target market. In weighing the advantages of Internet versus traditional print methods, television broadcasts and place-based media, it is clear to see that the consumer market potential is extremely limited in venue with geographical restrictions in most media being available only to the local viewing area with the exception of national broadcast television media. Rarely can a small-mid-size business approach sales on a national, or global level. By comparison, the Internet is an extreme opposite, having no physical or geographical limitations, and broadening the consumer base on the massive global scale. There is no cost associated with reaching and opening up the potential for consumers across the globe. The website is readily available to any consumer with a computer, and in this day and age, includes the majority of consumers throughout the world. The only downfall is the potential of irritating the future customer. However if advertisements are clear, speak plainly, and provide the information users want this risk can be minimized.
Sources:Stanford University. (2008). Quantitative Study for Society. RetrievedApril 30, 2008, fromhttp://www.stanford.edu/group/siqss/cgi-bin/index.phpHansell Saul. 2007. As Consumers Revolt, a Rush to Block Pop-Up Online Ads. Retrieved.
April 30, 2008, from http://query.nytimes.com/gst/fullpage.html?res=9F06E4DB1439F93AA25752C0A9629C8B63&sec=&spon=&pagewanted=allNielsen Jacob. 2005. The Most Hated Advertising Techniques. RetrievedApril 30, 2008, fromhttp://www.useit.com/alertbox/20041206.htmlMantor Desmond. 2005. Benefits of Online Advertising. Retrieved.
April 30, 2008, fromhttp://tools.devshed.com/c/a/Website-Advertising/Benefits-of-Online-Advertising/Mehta, Urvi. 2007. Internet Marketing Vs Television and Radio Advertising; a Panel of Experts to Share Tips and Advice on New Age Advertising Techniques. RetrievedApril 30, 2008, from http://www.1888pressrelease.com/internet-marketing-vs-television-and-radio-advertising-a-pa-pr-2t476a6kv.html

Google Case Analysis

noreply@blogger.com (On2thebadguy) — Wed, 2 Sep 2009 20:26:00 -0700

GoogleA.PositioningShort company historyGoogle Inc. was co-founded by Larry Page and Sergey Brin while they were attending Stanford University in 1998. The idea of this was a search engine that analyzed the relationships between websites would produce better ranking of results than existing techniques, like ranking results according to the most number of times the search term appeared on a site. Google was incorporated on September 4, 1998.
Google’s first funding source was from a Sun Microsystems co-founder, Andy Bechtolsheim, who helped contribute $100,000 in 1998. In 1999, the next group of investors were Kleiner Perkins Caufield & Byers and Sequoia Capital, who invested a total of $25 million into the company. The Google IPO took place on August 19, 2004. 19,605,052 shares were offered at a price of $85 USD per share.
Vision and Mission StatementGoogle’s mission statement is “to organize the world's information and make it universally accessible and useful”. Google believes that the most effective, and ultimately the most profitable, way to accomplish that mission is to put the needs of its users first. Google has found that offering a high-quality user experience leads to increased traffic and strong word-of-mouth promotion. Their dedication to putting users first is reflected in three key commitments:•We will do our best to provide the most relevant and useful search results possible, independent of financial incentives. Our search results will be objective and we will not accept payment for inclusion or ranking in them.
•We will do our best to provide the most relevant and useful advertising. Advertisements should not be an annoying interruption. If any element on a search result page is influenced by payment to us, we will make it clear to our users.
•We will never stop working to improve our user experience, our search technology and other important areas of information organization.
CustomersProducts or ServicesMarketsTechnologyConcern for survival, growth and profitabilityPhilosophySelf-ConceptPublic ImageEmployeesObjectivesGoogle’s objectives are partly named in its mission statement. Their goal is to organize the world’s information and to make it universally accessible to anyone. According to Google’s Annual 10-K Report, they serve their users by developing products that let them more quickly and easily find, create, organize and share information. They place a premium on products that matter to many people and have the potential to improve their lives.
Google offers a wide array of products and services. The most obvious and well know is their search engine named Google. The Google search uses PageRank, Algortihms, Link Measurement, and Profiling as part of its objective to deliver the most accurate and most relevant results to the searcher. Google also offers a very successful email product called Gmail. Gmail is unique in that it allows the email account holder much more free space (7GB) than the average free email client. In my experience, Gmail is an exceptional email client as it provides many more services than the standard email. It also enables its users to chat with each other through Google chat. This is something very innovative and unique only to Gmail. This also enhances the power of its objective to share and organize information more easily. You may also add labels and filters for specific information that needs to be separated and organized, this is something I find extremely useful as a consumer.
Google also offers Google Maps. Google Maps is a free web mapping service application and technology provided by Google that powers many map-based services including the Google Maps website, Google Ride Finder, Google Transit and embedded maps on third-party websites via the Google Maps API. It offers street maps, a route planner for traveling by foot, bicycle, car, or public transport and an urban business locator for numerous countries around the world. It also can help with finding businesses. Google Maps is another successful application in that it is not just an average web mapping system. This advanced mapping system offers satellite imagery of most urban cities in the US and around the world. It also can be integrated with many mobile phones, which allows for a GPS mapping system directly on the phone. These features allow its users to find information and easily share it to anyone in the world.
Google offers so many products and applications that I cannot discuss them all in detail, but the vast majority of these applications helps Google in reaching its objective to organize the world’s information and to make it universally accessible.
StrategiesWith the amount of traffic Google receives on a daily basis, Google has to have some kind of strategy to generate its revenue. One of Google’s main sources of revenue is advertising. In 2007, advertising accounted for 99% of Google’s revenues. Google implements two main advertising products which are AdSense and AdWords.
AdSense is an advertisement application run by Google. Website owners can enroll in this program to enable text, image, and more recently, video advertisements on their websites. These advertisements are administered by Google and generate revenue on either a per-click or per-impression basis. Google uses its internet search technology to serve advertisements based on website content, the user's geographical location, and other factors. AdSense has become a popular method of placing advertising on a website because the advertisements are less intrusive than most banners, and the content of the advertisements is often relevant to the website.
AdWords is Google's flagship advertising product and main source of revenue ($16.4 billion in 2007). AdWords offers pay-per-click advertising, and site-targeted advertising for both text and banner ads. The AdWords program includes local, national, and international distribution.
Google competes to attract and retain relationships with users, advertisers and Google Network members and other content providers in different strategies:• Users. Google competes to attract and retain users of its search and communication products and services. Most of the products and services thet offer to users are free, so they do not compete on price. Instead, they compete in this area on the basis of the relevance and usefulness of their search results and the features, availability and ease of use of their products and services.
• Advertisers. Google competes to attract and retain advertisers. They compete in this area principally on the basis of the return on investment realized by advertisers using their AdWords and AdSense programs. They also compete based on the quality of customer service, features and ease of use of our products and services.
• Google Network members and other content providers. Google competes to attract and retain content providers primarily based on the size and quality of their advertiser base, their ability to help these partners generate revenues from advertising and the terms of the agreements.
With these strategies in place, Google can effectively reach their objective of organizing the world’s information and having it easily accessible universally.
Porter’s Five Forces1)Bargaining Power of Suppliers:•Google is regionally not globally dominant.
•Competition Elimination and Substitution: Microsoft embedding their search tool into their Explorer browser.
•Threat of forward integration – Google search may not perform as well with new software releases from Microsoft and Apple.
2) Potential Entry of New Competitor:•Yahoo & Microsoft have radically improved their search engines and can on pass/deploy their search tool through their products.
•There is no such thing as the perfect search engine – thus a better search engine invented by another will critically affect Google•Online marketing and the rules governing what is good and bad practices (e.g. cloaking) are still evolving, this could affect Google’s current technology and philosophy.
•Switching costs are mostly related to hardware (storage of indices and speed of information return) and accuracy related (webbots/crawlers)•Search tools are easily scalable.
•While there is currently not a great degree of ‘legislative interference’ this will most likely change.
3)Rivalry Among Competing Firms:•Rules/ethic has not been defined so the environment is easily exploited or manipulated.
•Currently there are only a few rivals (Microsoft, Yahoo) so the degree of rivalry is more oriented to an oligarchy – this could bring attention of UN or individual countries as a restriction of trade in the future.
•Switching costs for most of the search tools are nothing.
•Brand identity is important (if not paramount – Google has made the word as a noun and a verb)•Rival search tools are not dissimilar to Google’s tool.
•Search tools are also used without overt referencing (which impinges on their discoverability) – eBay’s search tool is Google.
•Improving on the search engine and its features is a significant task for a large number of highly skilled IT technologists.
4)Threat of Substitutes:•High. Switching costs are negligible•Buyer inclination to substitute is primarily driven by speed and accuracy of the result and also by the overt pushing of ads that are included with the search results and pages.
•Users of the search tool are demanding more services and complexity or sophistication with the search tool to remain ‘loyal’ to its use.
•Ad Revenue is directly related to use, even the loss of a small percentage of use can mean significant revenue loss to Google or the other search generating companies.
•Technology requires extremely skilled staff – high degree of competition for a limited pool.
•Loss of company/trade secrets if skilled staff move from one search generating organization to another.
5)Buyer Power:•Use of the search rankings is a significant leverage point by the owners of search tools in bargaining.
•Loss of ranking has in the past led to costly legal arguments – equivalent of e-defamation of character or denial of services.
•Users of the search tool are becoming more sophisticated and demanding other services also for free.
•Substitutes are available – and for the same price: free•No real reviews are undertaken on what features the web community would like to see, so each search company employs researches to straw poll/guess directions.
•Two client groups – web community wanting to search/locate items and the organizations selling products – have to satisfy both client groups equally.
•Threat of backward integration?Competitive Profile MatrixSWOTStrengths•Google – Already number one search engine has established a brand name, in which its users trust. It’s dependable, reliable and fast.
•Google needs very little end user marketing as the name itself is getting word by mouth publicity.
•Google has a simple interface and it gives comprehensive results without confusing its users.
•Google has low operation cost as it uses low cost UNIX web servers for indexing millions of web pages across internet.
•Google has hired PhDs who are continuously working hard in order to enhance search algorithms and make searching faster, efficient and relevant.
Weaknesses•Many spammers manipulate Google’s ranking technology by creating dummy sites with thousands of links to pages that they wanted Google to rank highly.
•Google’s Cost Per Click advertising charging and ranking policy is confusing and makes it difficult for marketers to predict where their ads would be positioned and how much they would cost.
•Google’s contextual advertising was perceived by marketers to be less effective in generating sales because visitors to web pages showing editorial content were less likely than searchers to be ready to buy.
•Although Google is a dominating player among search engine websites, only 50% to 65% of web search queries are answered accurately by it.
•Contextual search algorithms are not 100% perfect and many a times make mistakes.
Opportunities•Google can increase switching cost by tracking users’ search histories with their permission and could remind users through emails for the relevant search updates as per their personal interest.
•Google can become a mass-market portal like Yahoo and MSN and can increase switching cost for its users.
•Google can enhance personalized and localized searching and can also add localized paid listings of advertisers.
•Google can also merge with an established mass-market portal to lock in large number of users and advertisers.
•Google can start giving full fledged services on hand held mobile devices to capture market beyond conventional internet.
Threats•Google partially depends upon some portals like AOL. Getting those contracts terminated, Google would lose considerable share of its revenue.
•There is no long time entry barrier in this business. Many competitors can emerge in coming years with same services, better interface and names and can catch up Google’s market.
•Google’s confusing Cost Per Click ranking and charging policy could disappoint its advertisers and Google would start losing many of them.
•Google’s scale might also become a liability in order to come up with new and enhanced search techniques if company’s ability to modify its algorithms and database architecture was constrained by its server infrastructure and the size of its index.
•Google can get trapped in issues regarding privacy if it decides to go for highly personalized search for which it has to capture user’s personal information.
External Factor Evaluation (EFE)Internal Factor EvaluationFinancial AnalysisThe Price/Earnings (P/E) ratio is a company's price-per-share divided by its earnings-per-share. Google’s P/E Ratio (TTM) is 25.96 meaning it has a relatively high valuation. Although one of its competitors, Yahoo!, has a higher P/E Ratio of 44.96. Microsoft’s P/E Ratio is 9.19 indicating a low, more conservative valuation. So although Google has more market share and revenues than Yahoo, Yahoo still maintains a higher P/E Ratio than Google. However, Google’s PE Ratio is still higher than others in the industry and sector it is in.
The Price to Sales (P/S) Ratio is the stock price (total market cap) / total sales (revenues). Generally, the lower the ratio, the more attractive the investment. As easy as it sounds, price-to-sales provides a useful measure for sizing up stocks. Google’s P/S Ratio is 5 which isn’t that great. Yahoo’s P/S Ratio is 2.45 and Microsoft’s P/S Ratio is 2.46. Yahoo still remains with the better numbers in this ratio also.
Price to Book (P/B) Ratio is the stock price (total market cap) / book value. Book value consists of the accounting value of assets less (real) liabilities, sort of an accounting net worth or owner's equity of a corporation. This figure has greater meaning in financial services industries, where most assets are actual dollars, not factories, inventories, and other hard-to-value items. A higher P/B ratio implies that investors expect management to create more value from a given set of assets. Google’s P/B Ratio is 3.83, which is greater than the industry and sector. Its competitor Yahoo, has a P/B Ratio of 1.57 which is below the industry standard. And Microsoft, another one of Google’s competitors, has a P/B Ratio of 4.43 which is above the industry standard. Microsoft most likely has much more tangible assets compared with Google and Yahoo hence the inflated ratio.
The Growth Rates in terms of Sales TTM vs TTM 1 year ago for Google is 31.35. This is a healthy number in terms of growth, it means that sales has gone up 31.35% since the same time 1 year ago. The Sales TTM vs TTM 1 year ago for Yahoo is 3.43, and for Microsoft is 7.05. This means that Google has had the most growth in sales within a 1 year TTM than its other two main competitors.
Earnings per share (EPS) are the earnings returned on the initial investment amount. EPS is generally considered to be the single most important variable in determining a share's price. It is also a major component used to calculate the price-to-earnings valuation ratio. The Earnings Per Share (EPS) TTM vs TTM 1 year ago growth rate for Google is 0.13. Yahoo’s EPS TTM vs TTM 1 year ago growth rate is -39.73, and Microsoft’s EPS TTM vs TTM 1 year ago growth rate is 6.14. This shows that there was not much growth in Google’s earnings returned to investors for the year. Yahoo’s EPS indicates that the earnings were negative and that investors lost on their initial investment. Microsoft saw the best EPS growth rates with its competitors at 6.14, meaning earnings increased for the year from its initial investment.
Internal-External MatrixThe EFE total weighted score for Google is 2.45 and the IFE total weighted score is 2.75. According to the Internal-External matrix, Google lands in region V of the matrix. This outcome suggests that Google should execute hold and maintain strategies such as market penetration and product development.
SPACE MatrixThis Google SPACE matrix tells us that our company should pursue an aggressive strategy. The company has a strong competitive position within the market with rapid growth. Google needs to use its internal strengths to develop a market penetration and market development strategy. This can include product development, integration with other companies, acquisition of competitors, and so on.
Grand Strategy MatrixThe Google Grand Strategy Matrix shows that the firm is positioned in quadrant I. This means that Google should continue to focus its concentration on current markets and also on its current product development strategies. Google remains in an excellent strategic position.
Factors:1. Google has strong market development.
2. Google has strong market penetration.
3. Google has strong product development.
SWOT MatrixCitationsGoogle, Inc. (2007). 10-K Annual Report 2007. Retrieved February 20, 2009, from SEC Info database <http://secinfo.com >Google, Inc. (2009). Corporate Information – Company Overview.
Retrieved February 20, 2009, from Google Inc. < http://www.google.com/corporate/>Google, Inc. (2009). Corporate Information – Google Milestones.
Retrieved February 20, 2009, from Google Inc. http://www.google.com/intl/en/corporate/history.htmlGoogle, Inc. (2009). Google Inc (GOOG.O) Stock Quote Stocks Reuters.comRetrieved February 20, 2009, from Reuters.com< " target=_blank>http://www.reuters.com/finance/stocks/overview?symbol=GOOG.O>

The Science and Art of Management

noreply@blogger.com (On2thebadguy) — Sat, 22 Aug 2009 12:48:00 -0700

The process of setting and achieving the organization’s goals through organizational resources is called management. To accomplish organizational goals, managers perform four basic functions of managerial work which are known as the four functions of management. These functions include planning, organizing, leading and controlling. These functions are highly integrated and recur throughout the organization. The four functions of management are important to all organizations, whether they are large national corporations, small family based businesses, or nonprofit organization.

Planning is the first function of management. Planning is the continuing process to set an organization’s goals missions and objectives, determining how to accomplish these goals, selecting priorities and results, identifying methods, resources, responsibilities and timeliness. Planning makes organizations adaptable to changes by identifying opportunities and avoiding problems. Planning improves the decision making process and sets the direction for the other functions of management. Planning helps the management to direct employee efforts towards group and organizational goal attainment. The planning function determines the effectiveness, efficiency and strategy of the organization .The activities in the planning process include: define mission, analyze weaknesses and strengths, identify threats and opportunities, set objectives and goals, develop operations and tactics and monitor plan. Planning is the step that is passed down to employees from the most upper management.

The second function of management is organizing. The establishment of the internal organizational structure of an organization and distribution of authority is referred to as organizing. The organizing process translates the planned steps into reality. An organizational structure is the outcome of organizing function. This structure coordinates and motivates employees to work together to achieve goals. The activities in the organizing process include: reviewing plans, list tasks, group tasks into jobs, group jobs, assign work and delegate authority and responsibilities.

The third function of management is leading. Leading is to influence people’s behavior through motivation, communication and group dynamics. Leading implies managerial activities with the aim of causing proper employee performance. Satisfactory fulfillment of this function involves finding out employee needs and creating reward systems for quality and timely work. Leading not only enables the employees achieving organization’s goal but simultaneously helps them achieving their own career objectives. Leadership involves a manager using power, influence, vision, persuasion, and communication skills. The outcome of leading function is high level motivation and commitment of employees towards organizational goals. The activities in leading process includes: determine direction, state a clear vision, building trust, and motivation, communication, managing conflict and attaining goals.

In the functional chain of management the final link is controlling which completes the circle of management cycle. Controlling is the process of establishing performance standards based on an organization’s goals, measuring performance, comparing and taking corrective actions, if necessary. The proper implementation of the plans is ensured by the controlling process. The controlling process assesses and monitors the current results and compares it with the actual plans. The outcome of controlling function is the accurate measurement of performance and regulation of efficiency and effectiveness. The activities in the controlling process include: establish performance standards, measure actual performance, compare measured performance against established and take corrective actions.

Relation of the four functions of management to my organizationI find my organization to be typical hierarchal structure of the pyramid style: top level managers: president, vice president; middle level managers: regional director; store manager; Front line managers: department managers front end manager and employees. My job function in the pyramid is the employee at customer service.

As all these four functions are interrelated, so all the levels of the organizational structure are involved in performing these functions but the major part of each function is related to a certain level. The first function, planning is carried out by the top level managers, organizing is done by the middle managers and leading is performed by the department and front end managers. Controlling is done by all level of managers.

In conclusion, organizations success depends on the proper implementation of these four functions which are paramount for the organization’s success. Failure is guaranteed to those managers who do not devote adequate attention to all four functions. The four functions of management are useful for a Fortune 500 business all the way down to personal management of one’s own assets. Whether the CEO of a top corporation or a housewife these functions are a solid groundwork to understand and achieve the goals that need to be met.

Alexander Hill- Just Business Book Review

noreply@blogger.com (On2thebadguy) — Thu, 20 Aug 2009 18:53:00 -0700

Alexander Hill, Just Business Christian Ethics for the Marketplace. (Intervarsity Press: Alexander Hill 2008) Pp. x + 276 Paper $14.95.

In “Just Business” Alexander Hill explains that in order to have Christian Ethics in the Marketplace we must “behave in a manner consistent with God’s character” (p.14) To do such a thing Hill attempts to give the answer to the question “What is God like?” (p.15) Hill explains that Gods character is one of holy, just, and loving. These three characteristics of God “have direct bearing on ethical decision-making” (p.15) and accurately display Christian business ethics. Hill recognizes the idea that Business ethics are not always holy, just, and loving and often collide with the view of Christian Business ethics. “Some common responses to business fall short of a fully Christian response” (back cover) In this revised addition of Just Business, Hill finds it important to address pressing topics such as employer-employee relations, discrimination, affirmative action, and environmental damage through penetrating case studies.

Opening up the first section of this book Hill characterizes God’s primary qualities as Holy-Just-Loving. It is noted here that “a business act is ethical if it reflects Gods holy-just-loving character.” (p. 15) Hill uses the holy-just-love concept in comparison to a three legged stool with each characteristic, “like a leg on a three legged-stool, balances out the other two.” (p. 16) “Christian ethics does not involve either-or analysis- as if we could choose between holiness, justice and love- but rather a synthesis in which all three conditions must be met before an action can be considered moral.” (p.16) Using several different scenarios Hill demonstrates the usage scripture coinciding with the Holy-Just-Love theory to make ethical decisions in the market place. Here it is demonstrated that Christian ethics “acknowledges that it is difficult to be holy-just-loving, not only because of human foibles but also because worldly institutions.” (p.20) Hill starts off the second section of this book Hill proposing the question “Are the ethical standards set by holiness, justice and love too high for the marketplace?” (p. 67) Hill sums up this question by addressing what he notes as false exits. False exits consist of issues such as dual morality, law and agency. They are referred to Hill as false exits “because they deposit ultimate ethical authority in human instrumentalities- business culture, government and corporate management- rather than God’s character.” (p. 67). False exits are a way for “us” humans to morally justify our wrong doings in the market place however, it is important to pay attention to the name, these exits are false and there is quite frankly no justification of wrong doing. The importance of honesty, deception, and disclosure are also addressed in this book. It is important to use honesty in business “One ethicists has gone so far to compare dishonesty to physical assault; both rob recipients of their freedom and dignity” (p. 128) “Deception may be defined as purposefully leading others to believe something we are selves do not believe.” (p. 129) Not only does it go against Christian ethics to deceive others but there are major consequences in the business world that could result from such actions; i.e. lawsuits. “Honesty, deception, and disclosure are difficult to apply with precision in the business environment.” (p. 124). However, “Deception, if ever justifiable, should be restricted to the most narrow confines possible.” (p.150) Lastly, Hill introduces case studies on important issues such as employer-employee relations, affirmative action, discrimination, and environmental damage. Hill realizes that all of these topics are apparent in today’s business market. They should be addressed and recognized by Christians today.

Hills findings set the example of the way Christians should present themselves in business. However, it should be noted that Hill wrote this book in a “Christian point of view” and that not every member in the work force or organization will come from a Christian stand point. “The foundation of Christian ethics in business is not rules but the changeless character of God.” (p.14) “When we behave in a manner consistent with God’s character, we act ethically.” (p. 14) “Christianity has not so much been tried and found wanting, as it has been found difficult and left untried.” (p. 11) “An ethical man is a Christian holding four Aces” (p. 11). The chances of this happening is 0.0018%. What are the odds?

The Manager's Job Folklore and Fact

noreply@blogger.com (On2thebadguy) — Thu, 20 Aug 2009 18:39:00 -0700

Managers today have various "roles" or organized sets of behaviors that identify with a position. A manager has formal authority and status which gives rise to the interpersonal roles figurehead, leader, and liaison. From interpersonal roles come informational roles and decisional roles. Of the perceived managerial roles, the leader role has always been recognized and is considered highly important.
We recognize the difference in a leader versus a manager, and what makes them effective. Today's managers spend the majority of their time with peers and subordinates rather than superiors. This is common across the board and not likely to change. Great leaders tap into the needs and fears we all share. Great managers, by contrast, perform best by discovering, developing, and celebrating what’s different about each person who works for them. While there are as many styles of management as there are managers, there is one quality that sets truly great managers apart from the rest: They discover what is unique about each person and then capitalize on it. They know and value the unique abilities and even the eccentricities of their employees, and they learn how best to integrate them into a coordinated plan of attack. (2) "Great leaders discover what is universal and capitalize on it. Their job is to rally people toward a better future. Leaders can succeed in this only when they can cut through differences of race, sex, age, nationality, and personality and, using stories and celebrating heroes, tap into those very few needs we all share. The job of a manager, meanwhile, is to turn one person’s particular talent into performance. Managers will succeed only when they can identify and deploy the differences among people, challenging each employee to excel in his or her own way. This doesn’t mean a leader can’t be a manager or vice versa. But to excel at one or both, you must be aware of the very different skills each role requires." (2)

With industrial organization, the practice of management changed radically in the early years of the 20th century but not much in the past few decades. As technology booms, we may see dramatic changes in the way human effort is mobilized and organized once again, changing the role of managers. (1) Given how little the practice of management has changed over the past several decades, it's hardly surprising that most people have a hard time imagining how management might be reinvented in the decades to come. When compared with the momentous changes we've witnessed over the past half-century in technology, lifestyles, and geopolitics, the practice of management seems to have evolved at a snail's pace. While a suddenly resurrected 1960s-era CEO would undoubtedly be amazed by the flexibility of today's real-time supply chains and the ability to provide 24/7 customer service, he or she would find many of today's management rituals little changed from those that governed corporate life a generation or two ago. Hierarchies may have gotten flatter, but they haven't disappeared. Front-line employees may be smarter and better trained, but they're still expected to line up obediently behind executive decisions. Lower-level managers are still appointed by more senior managers. Strategy still gets set at the top. And the big calls are still made by people with big titles and even bigger salaries. There may be fewer middle managers on the payroll, but those that remain are doing what managers have always done - setting budgets, assigning tasks, reviewing performance, and cajoling their subordinates to do better.
When faced with middle management decisions where innovation is key, especially in an established organization, a methodology for breakthrough management thinking is needed. While innovation can never be entirely scripted, it is possible to increase the odds of a eureka moment by assembling the right ingredients - starting with a disciplined process for unearthing and challenging the long-standing management orthodoxies that constrain creative thinking.

Today, millions of people have laptops and handheld computers -- thus spurring rapid development of wireless networks. And more than 20 million U.S. homes have broadband connections. As fast Net access takes off, it will spark altogether new ways of using the Internet that we're just beginning to imagine today. Technology hasn't settled down yet and its days of maturity may be decades away. The IT revolution may share many parallels with previous transformative technologies such as railroads and electricity, but it differs in one key way: The underlying technologies not only aren't slowing down, they're accelerating. Computer-chip performance keeps doubling every 18 months, and disk-drive capacity and Internet-connection speeds are improving even faster. That's spurring new products, from MP3 and DVD players to Web services for corporations, that are disrupting industries from entertainment to health care. Says Intel Corp. Chairman Andrew S. Grove, who has worked in tech for more than 40 years: "The rate of change in technology is as much today as any time in my experience."
This constant renewal is the essence of technology. It was in the last big tech downturn, in 1985-86, that some of today's titans got rolling -- Dell, for one. Today, Dell dominates PCs, with sales having risen 14% last year, to $35.4 billion. Founder Michael S. Dell's view today? "There's no shortage of new ideas and new technology coming. The evolution of technology is showing no signs of maturing whatsoever." The industry may well require more steady leadership in the difficult years to come. But for tech to remain a vital part of the economy, its leaders must make sure they don't slow down as they grow up. (3) In most Walgreens stores, each employee “owns” one aisle, where she is responsible not only for serving customers but also for facing the merchandise, keeping the aisle clean and orderly, tagging items with a Telxon gun, and conducting all resets and revisions. This arrangement is simple and efficient, and it affords each employee a sense of personal responsibility.

BIBLIOGRAPHY

2. Harvard Business Review What Great Managers Do march 2005 by Marcus Buckingham

Robert D. Hof Contributing: Wendy Zellner and Andrew Park in Dallas, Jay Greene in Seattle, and Jim Kerstetter in San Mateo, Calif. THE FUTURE OF TECH -- THE BIG PICTURE Why Tech Will Bloom Again Sure, parts of the industry have withered. But that's the way tech works, and new fruit is on the way Aug 25, 2003)