Month: July 2010

Types of Goods

Goods are the products that are made to fulfill the market needs and can be sold by a seller to a buyer for some monetary value. There are two types of goods free good and economic goods. Free goods are those which are not scarce and therefore such good are of non-monetary value such as air, water and sunlight. Although air, water and sunlight are natural and are not scarce but these things are sometimes not available at some places like water in deserted areas are imported from different places therefore people have to pay for it. Similarly if fans are used to get the air then such air will not be free people have to pay for the fan and the electricity. All those goods that have a monetary value are economic goods. Normally goods tend to have a diminishing marginal utility; this means that consumers ultimately decline to consume a product after a certain period of time even if the price of the product is lowered near to zero. This is because of the consumers satisfaction as if too much of good is consumed it will start reducing the satisfaction of consumer as there won’t be a desire for that good anymore. (Beatty, Pg 1100, 2007) Goods can be classified as follows: Consumer Goods Consumer goods are those goods which are bought for personal use. Goods such...

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Benchmarking

Benchmarking is a term used in business operating procedures. To benchmark one’s business is to compare its entire standard operating procedures, with the one which is regarded as a pioneer, or is a tycoon in the relative market. Benchmarking is done to deduce accurate performances by comparing the internal practices of an organization with the external industries.The improvements therefore are made accordingly, depending upon the purpose of benchmarking and it can be any out of the misc. e.g. reducing the cost, increasing the production, human relations, etc. Benchmarking in business is used in deciding the most appropriate and reliable way to handle all the affairs in handling a specific business. And it is through the competitive benchmarking, that companies successfully achieve their set goals and missions statement respectively. The process of benchmarking is studied under the stream of total quality management. The TQM is a philosophy in which consist the elements of various strategies, tactics, and above all includes the competitive bench marking technique. Generally, bench marking is of two types; partially and completely. The difference between these two is that in partial bench marking, the companies’ benchmark to point out their areas of glitch and work on them. Suppose a company is running with its own S.O.Pz’ but is unable to retain employees. So this company would benchmark the above ranked in terms of their area of glitch...

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Consumer Buying Behavior

The consumer buying behavior is defined as a process in which the individuals search, purchase, use and finally dispose of the goods and services in accordance to their needs, wants and satisfaction. In other words, the consumer buying behavior studies the actions and decisions of the people that motivate them to involve in buying and using the products, services that a company offers. The things need to understand under this topic are; • What is the reason behind ever purchase that a consumer makes? • What are the factors that influence the consumer purchases? • The variation of social factors. As aforementioned, the consumer behavior is the buying behavior of the ultimate customer. However the firms need to study the consumer behavior for the following reasons; • The reactions of the buyers to firms is an active ingredient of planning a marketing strategy and so this has an impact on the firm’s success • It is an essential component of creating a marketing mix, to understand the psychology of the consumer that what satisfies his needs, what he wants, how, and where, respectively. • The marketers can adeptly predict in designing the consumer response model to their marketing strategies. The consumer’s degree of complexity in making decisions is discussed as follows. That normally comprises of 6 different stages. 1.The needs awareness – Here the focus is on what actually...

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Advertising

Advertising is heavily focused on the analysis, planning, control, and decision-making activities of this core institution – ‘advertiser’. The field of advertising is made up of a system of interacting organizations and institutions, all of which play a role in the advertising process. At the core of this system are the advertisers, organization that provide financial resources that support advertising.  The advertiser provides the overall managerial direction and financial support for the development of advertising and the purchase of media time and space, even though many other institutions are involved in the similar process. Advertising is just like the other essential elements of the marketing plan, as amongst other marketing tools, advertising also can be used to attain the company’s objectives or its product or services can be refined. [adsense1]A brand manager needs to spend considerable time pinpointing the exact source of a brand’s poor sales before deciding that the core problem is inadequate or poor advertising or promotion. For instance, if research data indicate that consumers are trying the brand but are not purchasing it, it may well be that the firm’s advertising is successful but that the brand’s quality needs attention. The marketing plan thus should be based on the specific problems or opportunities uncovered for the brand. In addition to placing the advertising plan in the total context, the brand manager must also take care to...

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Capital Budgeting

Historically the role of accountants remained limited to clerical work where they were meant to manage day-to-day accounting matters and record keeping. When the economic horizons expanded and firms stretched out operations beyond the boundaries of their homeland and prolonged their investments in long-term projects and ventures wrapping over many years the role of typical accountants became worthless and new approaches emerged in the field of accounting and finance. Though great many developments were made and new techniques were adopted in the reporting mechanism for the limited financial period typically one year or less but they were not acquainted with the feasibilities, financial viabilities and assessing economic benefits from long lasting undertakings. To cope with the dearth of this matter a very comprehensive technique has been materialized in the community of financial managers called capital budgeting. Capital budgeting or investment appraisal as the name suggests concerns with the capital investments where the financial feasibility of a long-term project is determined. Capital budgeting is quite a profound subject and forms part of financial curriculum and financial management all over the world. This technique of determining financial viability attracts the investor due to the fact that it takes into account cash flow streams over the life of the project and exclude any non-cash expenditure such depreciation etc. Moreover cash flows are discounted to the present value at the investors’ required rate...

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Secondary Market

Secondary market is the market for trading outstanding securities among the investors. Outstanding securities means are the securities were issued in the primary market to the investors on return of amount paid to the underwriter bank. In primary market money is paid to the investors but incase of secondary market one investors pays to others investors. For Example – AT & T shares purchase in the new York stock exchange is the secondary market transaction as the shares were floated there after initial public offering which occurred in the primary market. Secondary market also exist for the dealing of other assets, bonds and loans. Secondary market play a vital role in the capital market. More investors in the secondary market means more liquidity and more demands for the shares. The market performed well if more number of investors are willing to purchase the securities on the other hand if more investors are involved in selling in that case demand for the shares goes down because investors want to pull out there money from the market.Investors always wish to see more liquidity in the market so his or her money not tied up for the long period of...

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Primary Market

Primary market also know as new issue market is the market for issuing new securities. Majority of the companies opt for issuing new share in the primary market to raise the capital for expansion of business or finance its operations depends upon company strategy. The companies sell their securities through IPO – Initial public offering which means the securities are first time issued in the primary market. Primary market is the market for first hand securities, it can also bought from the other shareholders but in that case it is called the secondary market transaction. Securities are issued on exchange basis in the primary market, investors pay money for the number of securities purchased from the company. Underwriters play an important role in issuing the securities to the public, they are the intermediaries between company and investors. They administrate the securities issuing process which involves handing over issued securities certificates to the investors on exchange of cash. The cash is paid to the company by the bank after deducting  their commission on issued securities. The collected amount generated from the issued shares are used to finance company operations or for expansion of the company. Shareholders can sell out the shares to other investors in the secondary market. Secondary market is the market for second hand shares or already issued shares. Once the shares are issued in the primary market...

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Cognitive Psychology

Cognition is a term that groups together the mental processes of perceiving, recognizing, conceiving, judging, and reasoning. The cognitive psychology focuses on how people and animals as well, structure their experiences, how they make sense of them, and how they relate their current experiences to past ones that have been stored in memory. At any given moment we are bombarded by far more stimuli than we can possibly respond to. How do we filter this overwhelming input, put it into words or images, from hypotheses, and arrive at a perception of what is out there? Cognitive psychologists consider the learning process much more complex than the passive formation of the new stimulus-response associations. Even classical conditioning is viewed by cognitive psychologies as an active process by which organisms learn about relationships among events rather than as an automatic stamping in of associations between stimuli. Moreover, cognitive psychologies regard the learner as an active interpreter of the situation, with the learner’s past knowledge imposing a perceptual funnel on the experience. The learner fits new information into an organized network of already accumulated knowledge, often referred to as schema, or cognitive set. New information may fit the schema; if not, the learner reorganizes the schema to fit the information or construes the information in such a way as to fit the schema. Although learning paradigms initially avoided cognitive concepts, contemporary experimental...

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Motivational Psychology

A person’s achievement may fall far short of his ability. The college teacher will readily think of students with A-grade ability but C-grade achievement, and it is also true in athletics or dramatics that some persons who seem to have plenty of ability are very disappointing in actual performance. They are not interested in an activity, or they have taken a personal dislike to the teacher or director or to their fellow performers, or perhaps they simply have not the energy to carry all the activities they have undertaken. What they lack is not the ability, but ‘motivation’. And so this discipline of psychology deals with everything about the motives, (origin, development, types etc), how they are classified and how motivation of work is exercised amongst individuals. Motive, is a set which predisposes the individual for certain activities and for seeking certain goals and they develop within an individual through maturation, exercise and learning. The organism is so equipped as to guarantee the learning and carrying out of certain activities essential for survival of the individual and the race. The equipment includes a persistent stimulus, increased general activity, and reinforcement of successful acts. The unlearned motives, for which our motor nerves are responsible for taking the prompt necessary action, can become more shaped and specific due to: • A persistent stimulus which we feel as the sensation of hunger,...

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What is Psychology?

Psychology can be defined as the science of activities of the individual. The science of human behavior is actually a group of sciences. On one side we find the physiology investigating the organs and cells that do the work of the organism and on the other hand we see the social sciences studying the nations and the groups of mankind. There is a room for a middle science that shall focus its attention on the individual. This middle science is called psychology. Psychology studies the individual’s activities through out his span of life, from his small beginnings before birth up through infancy, childhood, and adolescence to maturity, and still further on through the declining years. During this life history he remains the same individual, but his behavior shows continuity along with many changes. Psychology compares child and the adult, the normal and the abnormal, the human and the animal. It is interested in the differences between one individual and another, and still more interested, if possible, in the general laws of activity holding good even of very different individuals – laws, for example growth, learning, thinking and emotion. As per above statement, the word ‘activity’ is used here in a very broad sense. It includes not only the motor activities like walking, talking, but also cognitive activities like seeing, hearing, remembering, thinking and emotional activities like laughing, crying, feeling...

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