CUSTOMER

MARKETINGMARKETING

MarketingMarketing

Marketing is based on the Marketing is based on the importance ofimportance of customerscustomers to a businessto a business and has two and has two important principles: important principles:

1. 1. All company policies and activities should All company policies and activities should be directed toward be directed toward satisfying customer satisfying customer needs.needs.

2. 2. Profitable sales volume is more important Profitable sales volume is more important than maximum sales volume. than maximum sales volume.

. . . t. . . to best use these principles, a small o best use these principles, a small business shouldbusiness should::

Determine the needs of their customers Determine the needs of their customers through market researchthrough market research

AnalyAnalysse their competitive advantages to e their competitive advantages to develop market strategydevelop market strategy

Select specific markets bySelect specific markets by target marketingtarget marketing

Determine how to satisfy customer needs Determine how to satisfy customer needs

by identifying a market mix (price, place, by identifying a market mix (price, place, product, promotion)product, promotion)

Market researchMarket research Successful marketing requires timely and Successful marketing requires timely and

relevant market information. relevant market information.

research programresearch program ( (questionnairesquestionnaires)) uncover uncover dissatisfaction or possible new products or dissatisfaction or possible new products or

servicesservices

Market research will also Market research will also identify trends that identify trends that

affect sales and profitabilityaffect sales and profitability. Population shifts, . Population shifts, legal developments, and the local economic legal developments, and the local economic situation should be monitored to quickly identify situation should be monitored to quickly identify problems and opportunities. It is also important to problems and opportunities. It is also important to keep up with competitors' market strategies. keep up with competitors' market strategies.

Managing the Marketing Mix – 4 „P“Managing the Marketing Mix – 4 „P“

Every marketing program contains Every marketing program contains four key componentsfour key components: :

Products and ServicesProducts and Services - product - product strategies may include concentrating on strategies may include concentrating on a narrow product line, developing a a narrow product line, developing a highly specialized product or service, or highly specialized product or service, or providing a product-service package providing a product-service package containing unusually high-quality containing unusually high-quality serviceservice. .

PromotionPromotion - Promotion strategies include - Promotion strategies include advertising and direct customer advertising and direct customer interaction. Good salesmanship is interaction. Good salesmanship is essential for small businesses because of essential for small businesses because of they have limited ability to spend on they have limited ability to spend on advertising.advertising.

Managing the Marketing Mix – 4 „P“Managing the Marketing Mix – 4 „P“

Managing the Marketing Mix – 4 „P“Managing the Marketing Mix – 4 „P“

DistributionDistribution (Place)(Place) - The - The manufacturer and wholesaler must manufacturer and wholesaler must decide decide how to distributehow to distribute their their products. products.

Working through established distributors Working through established distributors or manufacturers' agents generally is or manufacturers' agents generally is easiest for small manufacturers. easiest for small manufacturers.

PricePrice - The right price is crucial for - The right price is crucial for maximizing total revenue. Generally, maximizing total revenue. Generally, higher prices mean lower volume and vice-higher prices mean lower volume and vice-versa; however, small businesses can versa; however, small businesses can often command higher prices because of often command higher prices because of their personalized servicetheir personalized service..

Managing the Marketing Mix – 4 „P“Managing the Marketing Mix – 4 „P“

What is What is managementmanagement

- Process of coordinating Process of coordinating of of resources resources to meet an objectiveto meet an objective

- Planning, organising, directing and Planning, organising, directing and controllingcontrolling

Managerial RolesManagerial Roles

Management SkillsManagement Skills

Management SkillsManagement Skills

Technical skillTechnical skill involves process or involves process or technique knowledge and proficiency. technique knowledge and proficiency. Managers use the processes, techniques Managers use the processes, techniques and tools of a specific area. and tools of a specific area.

Human skillHuman skill involves the ability to interact involves the ability to interact effectively with people. Managers interact effectively with people. Managers interact and cooperate with employees.and cooperate with employees.

Conceptual skillConceptual skill involves the formulation involves the formulation of ideas. of ideas.

SWOT analysisSWOT analysis- SStrengthstrengths

- WWeaknesseseaknesses

- OOpportunitiespportunities

- TThreatshreats

For example:For example: ŠKODA Auto, a. s. ŠKODA Auto, a. s.

- StrengthsStrengths(the only car producer in the CR, monopoly position, tradition, …)(the only car producer in the CR, monopoly position, tradition, …)

- WeaknessesWeaknesses(impossibility of collaboration with Czech car company, „unknown“ (impossibility of collaboration with Czech car company, „unknown“ car mark in the world, …)car mark in the world, …)

- OpportunitiesOpportunities(cooperation with German car factories, price competitiveness: low-(cooperation with German car factories, price competitiveness: low-cost labour force, …)cost labour force, …)

- ThreatsThreats(european and world competitiveness, failures of subsuppliers, …) (european and world competitiveness, failures of subsuppliers, …)

SWOT analysisSWOT analysis??????????????

Strengths (…….)Strengths (…….)

Weaknesses (…….)Weaknesses (…….)

Opportunities (…….)Opportunities (…….)

Threats (…….)Threats (…….)

FINANCIAL FINANCIAL

MANAGEMENTMANAGEMENT

Financing of the enterpriseFinancing of the enterprise

Each activity in the enterprise has two sides:

material (tangible, assets) – flow of machines, raw material, material, finished products, which are possible to divide on activities of supplying etc.

cash (financial) – flow of income and expenses. Each activity has to be ensure by so financial means (resources).

Tangible and financial flows has to be in concordance.

Forms of financingForms of financing

1) According to the origin of capital:

a) internal financing,b) external financing.

2) According to the period of using :

a) long-term financing,b) short-term financing.

3) According to the regularity of financing:

a) usual financing,b) unusual financing.

Balance SheetBalance Sheet - - wwhat the company hat the company owns and owes owns and owes

Income StatementIncome Statement - - hhow good the ow good the company is at making moneycompany is at making money

Cash Flow StatementCash Flow Statement - - hhow they're ow they're paying for their operations and their paying for their operations and their future growthfuture growth

AssetsAssets LiabilitiesLiabilitiesCurrent assetsCurrent assets Current liabilitiesCurrent liabilitiesCash and cash equivalentsCash and cash equivalents Accounts PayableAccounts PayableInventoriesInventories - - net net Sales Taxes PayableSales Taxes PayableOther current assetsOther current assets Payroll Taxes PayablePayroll Taxes Payable

Accrued Wages PayablAccrued Wages Payablee

SShort-Term Notes Payablehort-Term Notes PayableShort-Term Bank Loan PayableShort-Term Bank Loan Payable

Fixed assetsFixed assets Long-Term LiabilitiesLong-Term LiabilitiesFixtures and equipmentFixtures and equipment Long-Term Notes PayableLong-Term Notes Payable

Mortgage PayableMortgage Payable

Other assetsOther assetsTrademarksTrademarks, etc., etc.

Total assetsTotal assets Total LiabilitiesTotal Liabilities

     

Structure of assetsStructure of assets

Assets in the balance sheet Assets in the balance sheet areare divided into divided into three groupsthree groups::

Current Current – cash,– cash, bank bank accounts, inventories accounts, inventories (raw materials, goods in process)(raw materials, goods in process)

FixedFixed – property, plant, equipment – property, plant, equipment (permanent investments)(permanent investments)

IntangibleIntangible – patents on a process or – patents on a process or invention, copyrights, trademark, goodwillinvention, copyrights, trademark, goodwill

LiabilitiesLiabilities

- c- can be characterized as the debt a an be characterized as the debt a business owes, represent claims against business owes, represent claims against the assetsthe assets

llong term, currentong term, current

Current liabilitiesCurrent liabilities – accounts pa – accounts payyble, notes ble, notes payable, accrued expensespayable, accrued expenses

Long–term liabilitiesLong–term liabilities – debts that fall due a – debts that fall due a year or more after the date of the balance year or more after the date of the balance sheet, leases, mortgagessheet, leases, mortgages

Property and capital Property and capital structure of the firmstructure of the firm

Each business needs tangible and intangible resources: buildings, machines, material, means of transport, etc., which are together called „properties - equity“ and each item „assets“.To get these properties, each company need some sources - so called „capital“ (internal or external). Capital resources are called liabilities.

Process organization of Process organization of productionproduction

A/A/ Pre-production stagePre-production stage - inventory - inventory purchase, raw materials needed for purchase, raw materials needed for the purchase orderthe purchase order all the all the documentation is prepared (technical, documentation is prepared (technical, manufacturing and also for product)manufacturing and also for product) product developmentproduct development

purchase of : 1/ materialpurchase of : 1/ material

2/ components, part2/ components, partss

Process organization of Process organization of productionproduction

B/ B/ Production stageProduction stage - - 3 phases3 phases:: 1/ using of raw materials to make a semi-1/ using of raw materials to make a semi-

finished product (size and shape design)finished product (size and shape design) 2/ making the final product (final parts, 2/ making the final product (final parts,

assembly)assembly) 3/ complete phase (final product according 3/ complete phase (final product according

to customer wishes, surface design, to customer wishes, surface design, control, testing, and wrapping)control, testing, and wrapping)

C/ C/ After- production stageAfter- production stage - completion of - completion of products into order, goods despatchproducts into order, goods despatch

OPERATION STRATEGYOPERATION STRATEGY - company competitiveness refers to its company competitiveness refers to its

relative position in relative position in comparison to other comparison to other firmsfirms in the local or global marketplace in the local or global marketplace

It includeIt includess:: ccapacity requirementsapacity requirements facilitiesfacilities technologytechnology vertical integrationvertical integration workforceworkforce qualityquality production planning/materials controlproduction planning/materials control organizationorganization

Just-in-time productionJust-in-time production- Just-In-Time is a Japanese Just-In-Time is a Japanese

manufacturing management manufacturing management methodmethod developed in developed in 1970s1970s

- producing only necessary units in a producing only necessary units in a necessary quantity at a necessary necessary quantity at a necessary time time

- it helps to completely eliminate it helps to completely eliminate unnecessary inventories in the factoryunnecessary inventories in the factory

New methods of production management:New methods of production management:

Kanban system Kanban system

- i- it is the way to manage the Just-in-time t is the way to manage the Just-in-time production method production method

- it is an information system to it is an information system to harmoniously control the production harmoniously control the production quantities in every process quantities in every process

- it gives an information what kind of units it gives an information what kind of units and how many units are needed (it is and how many units are needed (it is written on a tag-like card called written on a tag-like card called „Kanban“)„Kanban“)

New methods of production management:New methods of production management:

RecapitulationRecapitulation

Basic termsBasic terms

BBusinessusiness

- all the work involved in providing people with goods and services for a profit

Profit

- is the money left over from all sums received from sales after expenses, which have been deducted

Enterprise

- an independent subject, founded usually by entrepreneur on purpose to achieve some profit, which is usually the main objective of business

Entrepreneur Entrepreneur

Basic terms

- person who starts or takes over a business and takes the financial and personal risks involved in keeping it going- one who decides what to produce, how to produce it and how to sell the output

Manager

- person, who holds the basic managerial functions as planning, organizing, recruitment and leading of people

Leader

- person, who is able to gain and affect people so they will make an effort to achieve firm goals

Basic termsBasic terms

Organizational structureOrganizational structure - process of arranging work, dividing responsibilities, coordinating

Economics

– a science concerned with law governing the

economic life of society- to meet human wants and needs with limited sources- how, what and for whom

Basic termsBasic terms

EconomyEconomy

- complex of activities and subjects (firms, companies, state, individuals) concerned with the production, distribution, exchange and consumption of goods within a certain area

Supply – the goods being soldDemand – the interest of the buyers to purchase the commodities offeredMarket price – a figure determined by the relation between the supply and the demandEquilibrium – point of intersection between supply and demandCompetition – creates an inseparable conditions for the existence of any market

Basic termsBasic terms

Balance sheetBalance sheet

- it is a financial picture of the enterprise at the close of

business on a particular date (end of a month, a quarter, a year)

Long-term equity

- in the balance sheet it is called „ fixed assets“. It is the equity, which is used in the firm longer than 1 year

Basic termsBasic terms Rate of returnRate of return

- is simply how much you earn from an investment over time. Rate of return includes interest payments or dividend payments as well as the difference between an investment’s starting price and its ending price. Rates of return are typically calculated as a percentage, which is the growth in value of an investment over a time period compared to its starting value. An investment does not need to be purchased or sold to make this calculation. The market price is used to measure a rate of return.

Basic termsBasic terms InventoryInventory

- a detailed list of all the items in stock

- all goods and materials available for sale (in the case of wholesalers, retailers, and distributors) or raw materials and supplies, work in process, and finished goods (in the case of manufacturers)

- listed in the current assets section on the statement of financial position

Basic termsBasic terms Income statementIncome statement

- summarizes a company's revenues and expenses for a fiscal year. It is one of four financial statements presented in the annual report, reflecting a company's operating performance by identifying the sources of income and the various costs and expenses, gains and losses, which results in a final net income figure

Cash flow statement

- financial records of receipts and expenditures during a specific period

Basic termsBasic terms LiabilitiesLiabilities

- financial obligations, debts, claims or potential losses. For example, a company's debts to a lender, a supplier of goods and services, a tax authority and others. Listed on the consolidated balance sheets

Assets

- any item of economic value owned by an individual or corporation, especially that which could be converted to cash. Examples are cash, securities, accounts receivable, inventory, office equipment, a house, a car and other property

Liquidity (payback period)

- period of transformation of investment back to cash form

… … this is the end of our Preliminary this is the end of our Preliminary Course Business Administration!Course Business Administration!

… see you on… see you on 25th October :o)25th October :o)