Target Markets and Segmentation
Target Markets and Segmentation
Friday, May 15, 2009
[Wikipedia]
Marketing is an integrated communications-based process through which individuals and communities discover that existing and newly-identified needs and wants may be satisfied by the products and services of others.
Marketing is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. [1] The term developed from the original meaning which referred literally to going to market, as in shopping, or going to a market to buy or sell goods or services.
Marketing practice tends to be seen as a creative industry, which includes advertising, distribution andselling.
Marketing is influenced by many of the social sciences, particularly psychology, sociology, andeconomics. Anthropology and neuroscience are also small but growing influences. "
Wednesday, May 13, 2009
Approaches:
The net operating income approach assumes that creditors do not increase their required rate of return as a company takes on debt, but investors do. Further, the rate at which investors increase their required rate of return as the financing mix is shifted toward debt exactly offsets the weighting away from the more expensive equity and toward the cheaper debt. The result is that the cost of capital remains constant regardless of the financing mix. This approach concludes that there is no optimal financing mix¾any mix is as good as any other.
Assumptions:
1. Cost of debt remain constant with change in d/e ratio.
2. cost of equtiy increases with increase of Debt capital structure.
3. Overall cost of capital remain constant.
Implications:
=====>i. for Zero debt company Ke= Ko
=====>ii. In a given risk category, firms with different capital structure will have same cost of debt and
cost of captial
Traditional Approach
The traditional approach assumes that both creditors and investors increase their required rates of return as a company takes on debt. At first this increase is small, and the weighting toward lower-cost debt pushes the cost of capital down. Eventually, the rate at which creditors and investors increase their required rates of return accelerates and dominates the weighting toward debt, pushing the cost of capital back upward. The result is that the cost of capital declines with debt and reaches a minimum point before rising again. This approach concludes that there is a optimal financing mix consisting of some debt and some equity.
Assumptions:
1. When a capital structure is changed cost of debt and cost of equity change. At loc D/E ratio cost of debt and equity are relatively low.
Monday, May 11, 2009
The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.
NPV analysis is sensitive to the reliability of future cash inflows that an investment or project will yield.
The NPV analysis then gives a precise formula for deciding whether or not to proceed with the investment project. Applying NPV analysis requires judgements about revenues,expenses, depreciation tax shields, true economic lives of plant and equipment, and the appropriate discount rate. Precision of method is not the same as precision of result.The validity of the assumptions is also critically important.garbage-in, garbage-out
Sunday, May 10, 2009
Friday, May 8, 2009
1. Entrepreneurial Marketing:
Most companies are started by individuals who visualize an opportunity and knock on every door to gain attention.
2. Formulated Marketing
After achieving success by small companies, they do marketing department carries market research, adopting some of the tools used in profession.
Latest ratings, scanning research reports, trying to fine-tune dealer relations and ad messages.
3. Intrepreneurial Marketing :
Large companies stuck in formulated due to lack of creativity and passion.
Brand and product mangers start to living with their customers and visualizing new ways to add value to their consumers lives.
Src : Marketing management Kotler
Tuesday, April 28, 2009
What is the payback period? What are the advantages and limitations of using this method?
PP is the simplest method of looking at one or more investment projects or ideas. This method focuses on recovering the cost of investments. PP represents the amount of time that it take
For a capital budgeting project to recover its initial cost.
(cost of proj /Investment )
PP = -------------------------------
Annual cash inflows
Eg: proj cost $200,000, and returns of proj 40,000 annually.
PP here is $200,000 /40,000 = 5 years.
Advantage: Easy to calculate
Problems:
Monday, April 27, 2009
[A]
Agency problem is the problem or conflict between the management of the company the the owner or principal of the company. The problem or conflict comes from the different interest of management and owner. This problem will affect the performance of the company and also the financial decision of the company such as when the company want to issue the new stock or the new bond. Besides, the companies must run the business in the best interest of all stakeholders. One of the stakeholders is the shareholder. In order to achive that goal today many companies implement the corporate governance system. The corporate governance system is used to make sure that the management of the company can run the company in the best interest of all stakeholders. Because shareholders are part of stakeholder, therefore the corporate governance system can also reduce the agency problem 1. Principal-Agent Problem. where one party, called an agent, acts on behalf of another party, called the principal. The agent usually has more information about his or her actions or intentions than the principal does, because the principal usually cannot perfectly monitor the agent. The agent may have an incentive to act inappropriately (from the viewpoint of the principal) if the interests of the agent and the principal are not aligned. 2. Moral hazard Moral hazard is related to information asymmetry, a situation in which one party in a transaction has more information than another. The party that is insulated from risk generally has more information about its actions and intentions than the party paying for the negative consequences of the risk. More broadly, moral hazard occurs when the party with more information about its actions or intentions has a tendency or incentive to behave inappropriately from the perspective of the party with less information. 3. Adverse Selecction The term adverse selection was originally used in insurance. It describes a situation where an individual's demand for insurance (either the propensity to buy insurance, or the quantity purchased, or both) is positively correlated with the individual's risk of loss (e.g. higher risks buy more insurance), and the insurer is unable to allow for this correlation in the price of insurance. This may be because of private information known only to the individual (information asymmetry), or because of regulations or social norms which prevent the insurer from using certain categories of known information to set prices (e.g. the insurer may be prohibited from using information such as gender or ethnic origin or genetic test results). Src:http://en.wikipedia.org
One of the most important shifts in the emphasis of HR management in the past
few years has been the recognition of HR as a strategic business contributor. Even
organizations that are not-for-profit, such as governmental or social service entities,
must manage their human resources as being valuable and in a “businessoriented”
manner. Based upon the research and writings of a number of scholars,
including David Ulrich of the University of Michigan, the importance of HR
being a strategic business partner has been stressed.16 This emphasis has several
facets to it.
SOURCE: Reprinted with permission from Bulletin to Management (BNA Policy and Practice Series) Vol. 49
Monday, April 20, 2009
Administrative Role of HR Management
The administrative role of HR management is heavily oriented to processing and
record keeping. Maintaining employee files and HR-related databases, processing
employee benefits claims, answering questions about tuition and/or sick leave
policies, and compiling and submitting required state and federal government reports
are all examples of the administrative nature of HR management. These activities
must be performed efficiently and promptly.
However, this role resulted in HR management in some organizations getting
the reputation of paper shufflers who primarily tell managers and
employees what cannot be done. If limited to the administrative role, HR staff
are seen primarily as clerical and lower-level administrative contributors to the
organization.
Operational Role of HR Management
Operational activities are tactical in nature. Compliance with equal employment
opportunity and other laws must be ensured, employment applications must be
processed, current openings must be filled through interviews, supervisors must
be trained, safety problems must be resolved, and wages and salaries must be administered.
In short, a wide variety of the efforts performed typically are associated
with coordinating the management of HR activities with the actions of
managers and supervisors throughout the organization. This operational emphasis
still exists in some organizations, partly because of individual limitations of
HR staff members and partly because of top management’s resistance to an expanded
HR role.
Typically, the operational role requires HR professionals to identify and implement
operational programs and policies in the organization. They are the major implementors
of the HR portion of organizational strategic plans developed by top
management, rather than being deeply involved in developing those strategic plans.
Strategic Role of HR Management
Organizational human resources have grown as a strategic emphasis because effective
use of people in the organization can provide a competitive advantage, both
domestically and abroad. The strategic role of HR management emphasizes that
the people in an organization are valuable resources representing significant
organizational investments. For HR to play a strategic role it must focus on the
longer-term implications of HR issues.15 How changing workforce demographics
and workforce shortages will affect the organization, and what means will be
used to address the shortages over time, are illustrations of the strategic role. The
importance of this role has been the subject of extensive discussion recently in
the field, and those discussions have emphasized the need for HR management
to become a greater strategic contributor to the success of organizations.
| Personnel | Human Resource |
1. | Traditional, Routine, Maintenance-oriented, Administrative function | Continuous, On-going development function aimed at improving human processes |
2. | Independent function with independent Sub-functions | HRD follows the systems thinking approach. It is not considered in isolation from the larger organization and must take into account the linkages and interfaces |
3. | Reactive, Responding to demands as and when they arise. | HRD isProactive, Anticipating, Planning and Advancing continuously |
4. | PM is the exclusive responsibility of the personnel department | HRD is a concern for all managers in the organization and aims at developing the capabilities of all line managers to carry out the personnel functions. |
5. | The scope of PM is relatively narrow with a focus on administering people | The scope of HRD views the organization as a whole and lays emphasis on building a dynamic culture. |
6. | Important motivators in PM are compensation, rewards, job simplification and so on. | HRD considers work groups, challenges and creativity on the job as motivators. |
7. | In PM improved satisfaction is considered to be the cause for improved performance | HRD it is the other way round (performance is the cause and satisfaction is the result). |
Definition:
[Wikipedia]
Human resource management (HRM) is the strategic and coherent approach to the management of an organisation's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business.[1] The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations.[1] In simple sense, HRM means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.
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2
Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers.
Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.
3.
A model of personnel management that focuses on the individual rather than taking a collective approach. Responsibility for human resource management is often devolved to line management. It is characterized by an emphasis on strategic integration, employee commitment, workforce flexibility, and quality of goods and services.
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