ECON 103 Lecture Notes - Lecture 17: Marginal Cost, Economic Surplus, Deadweight Loss
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On Monday, May 26, Tina Brown walked into Innovative Patios to begin her new job as Payroll Manager. She was met by Julie Thornbury, President and major shareholder of the company. Julie got to the point: Good, you're here. I need a payroll plan by Friday. This place is a mess.
Yesterday I got a call from Human Resources & Skills Development Canada . He said we aren't filing ROEs. Do you know what they are?
We've got employees telling us that they get more tax deducted than their friends who earn the same amount. Jim, our production manager is barking that he should have a tax credit for his kid. We've been fined for sending in employee taxes late. I don't get it. I pay two people to run the administrative side of things and they mess things up.
I hear there are changes in the pipeline. I heard about the federal budget, but I don't know if we will benefit or not. Will it be just more paperwork? The bottom line is that I don't want any more government types coming around here threatening me. Tell me what we have to do.
Company History
Innovative Patios is a private corporation that installs patios stones made from recycled material. The company was started twenty years ago by Julie's parents Elena and Seamus. Elena and Seamus were immigrants to Canada and earned a living through a small landscaping business. They hired workers on contract and paid in cash for many years until they were audited by the tax department.
To avoid further problems, they incorporated the company five years ago, but their workers on the payroll, and hired Mary as a bookkeeper to fill out all the government forms.
Payroll Department
Mary quickly became Innovative Patios office manager, human resources manager, financial administrator and payroll manager. The workload was overwhelming and she convinced Julie to hire Liza to help her. Liza suggested they use Quicken to keep track of all accounts including payroll.
Mary and Liza fill out all cheques by hand for the ten employees and fill out all the government forms by hand. The company's remittances are based on a checklist Mary developed in 2009 (See Exhibit), Mary is unhappy because she works very hard, but everyone complains about things being wrong. When Julie landed a large contract that would require 15 more people be hired, Mary recommended that Julie hire a professional payroll manager. I can handle the other stuff, but the Canada Revenue Agency and the employee complaints are driving me crazy. I just can't keep up. I will be as helpful as I can.
Julie led Tina to her office and rushed off to take care of a crisis on the loading dock. Before Tina could get settled, Mary walked in, I am so happy to meet you. Just tell me what you need and Liza and I will get it for you. The employees are paid bi-weekly and this Wednesday is a payday. I haven't prepared anything
because I knew you would be here.
Exhibit: Mary's 2009 Remittance list
|
Item |
Amount |
How much to remit |
When |
|
Payroll |
Annual $500,000 |
$1,000 payroll remittance |
Monthly Pay balance plus interest when assessment arrives |
|
CPP |
4.95% earnings (to annual max) |
$2,062.50 |
Monthly |
|
EI |
1.98% earnings (to annual Max) |
$49,000 |
Year-end |
|
GST |
Net annual subject to HST $200,000 at 13% |
$1,500 |
Monthly Use the refund to go toward payroll remittances due |
Please answer the following questions:
a) Who are the key stakeholders in this case?
b) What are the resources needed?
c) What resources are available?
d) What is the main issue in this case?
Thank you in advance!
On Monday, May 26, Tina Brown walked into Innovative Patios to begin her new job as Payroll Manager. She was met by Julie Thornbury, President and major shareholder of the company. Julie got to the point: Good, you're here. I need a payroll plan by Friday. This place is a mess.
Yesterday I got a call from Human Resources & Skills Development Canada. He said we aren't filing ROEs. Do you know what they are?
We've got employees telling us that they get more tax deducted than their friends who earn the same amount. Jim, our production manager is barking that he should have a tax credit for his kid. We've been fined for sending in employee taxes late. I don't get it. I pay two people to run the administrative side of things and they mess things up.
I hear there are changes in the pipeline. I heard about the federal budget, but I don't know if we will benefit or not. Will it be just more paperwork? The bottom line is that I don't want any more government types coming around here threatening me. Tell me what we have to do.
Company History
Innovative Patio is a private corporation that installs patios stones made from recycled material. The company was started twenty years ago by Julie's parents Elena and Seamus. Elena and Seamus were immigrants to Canada and earned a living through a small landscaping business. They hired workers on contract and paid in cash for many years until they were audited by the tax department.
To avoid further problems, they incorporated the company five years ago, but their workers on the payroll, and hired Mary as a bookkeeper to fill out all the government forms.
Payroll Department
Mary quickly became Innovative Patios office manager, human resources manager, financial administrator, and payroll manager. The workload was overwhelming and she convinced Julie to hire Liza to help her. Liza suggested they use Quicken to keep track of all accounts including payroll.
Mary and Liza fill out all cheques by hand for the ten employees and fill out all the government forms by hand. The company's remittances are based on a checklist Mary developed in 2009 (See Exhibit), Mary is unhappy because she works very hard, but everyone complains about things being wrong. When Julie landed a large contract that would require 15 more people to be hired, Mary recommended that Julie hire a professional payroll manager. I can handle the other stuff, but the Canada Revenue Agency and the employee complaints are driving me crazy. I just can't keep up. I will be as helpful as I can.
Julie led Tina to her office and rushed off to take care of a crisis on the loading dock. Before Tina could get settled, Mary walked in, I am so happy to meet you. Just tell me what you need and Liza and I will get it for you. The employees are paid bi-weekly and this Wednesday is a payday. I haven't prepared anything
because I knew you would be here.
Exhibit: Mary's 2009 Remittance list
|
Item |
Amount |
How much to remit |
When |
|
Payroll |
Annual $500,000 |
$1,000 payroll remittance |
Monthly Pay balance plus interest when assessment arrives |
|
CPP |
4.95% earnings (to annual max) |
$2,062.50 |
Monthly |
|
EI |
1.98% earnings (to annual Max) |
$49,000 |
Year-end |
|
GST |
Net annual subject to HST $200,000 at 13% |
$1,500 |
Monthly Use the refund to go toward payroll remittances due |
Please answer the following questions:
a) Who are the key stakeholders in this case?
b) What are the resources needed?
c) What resources are available?
d) What is the main issue in this case?
Thank you in advance!
The purpose behind much of advertising is to influence each of the five Consumer Decision Making process (Problem Recognition, Information Search, Evaluation of Alternatives, Product Choice (i.e. Purchase) and Outcomes (i.e. Postpurchase). Each stage of the Consumer Decision Making process has techniques that help consumers to manage the stage and then move onto the next one successfully. Eventually, the consumer moves to purchase (where we get excited to make the sale) but don't underestimate how important the last stage (post purchase) is to making additional sales in the future. Below are guidelines that show basic techiniques used to target and manipulate each Consumer Decision Stage through advertising.
Below are some issues that you will want to consider as you evaluate each of the five chosen advertisements. Please remember that your goal is not simply to answer these questions, but to provide insights into the consumerâs decision making process that you feel would be useful to a marketing manager (e.g., if an ad triggered the consumerâs decision to purchase the product). Other areas to comment on would be level of involvement, etc.
| Consumer Decision Making Stage: | Considerations for Stage: | Common Ad Techniques: |
| Problem Recognition | What problems does this product solve for the consumer? ⢠What triggered the decision to purchase this product? ⢠Was this the first time the consumer purchased such a product? Define and discern the Actual and Desired States | Ask a question (Whatâs for dinner tonight?) Show before (actual state) and after (desired state) Use the word ânewâ or âintroducingâ to initiate curiosity. |
| Information Search | ⢠Did the consumer seek information about the product and about various brands? How was this information collected, and how much information was collected? ⢠Was the consumer searching for any advertisements for the product? What was the consumerâs reaction to these advertisements? | Match amount of information with type of product. Direct consumers to website, free kit or other information venues. Show role models that âlookâ like the target market. Show the entire line of product offerings (all the flavors and colors, etc.) Testimonials, etc. |
| Evaluation of Alternatives | ⢠How many alternatives were considered? How were they selected?⢠What features and characteristics of the product were most important to the consumer? Salient and Determinant defined attributes. | Featuring specific variables that the product is known for (ex. Volvo=Safety). This is known as âpositioningâ a product. Competitive method (brand compares themselves to âleading brand or categoryâ) Comparative method (brand compares themselves to another brand by name (Coke vs. Pepsi) |
| Product Choice | ⢠Did any other people play a role in the decision process? Describe theroles that each person played. | Tell consumers where and how the product is sold. Offer many ways to pay for the product. Divide payments. Offer sales promotion (coupons, rebates) |
| Post-Purchase Evaluation | ⢠How is the product used and consumed? How does the consumer feel when he or she uses the product? Does it merely Does the Ad encourage repeat purchase or loyalty to the brand- how? | Show awards the brand has won. Show how a brand should be consumed. Allow consumers many ways to return the product. Allow consumers to easily provide feedback. Reward consumers loyalty |
This assignment asks you to find one ad that addresses each of the needs of the five stages (in other words five different ads). This means that there must be five different ads for the total project, one for each stage (all ads are different from one another). Create a Power Point Presentation that shows how the advertiser is addressing the needs of the consumer for the specific Consumer Decision Making stage.
*Be aware that there is a helpful power point demonstration in a conference opened this week marked as "Advertising and the Consumer Decision Process (Ad Examples)". This is informative only and does not need to be commented on.
First, show the ad in a slide and then follow-up with a slide which explains (bullet form) why the ad slide targets the Consumer Decision Making process stage. ALL ADS MUST BE STILL ADS (NO VIDEOS or LINKS). Therefore the ad MUST be able to be copied and pasted within the power point slide (NO LINKS). Here is the format of the presentation:
Slide 1: Name, date
Slide 2: Problem Recognition Ad
Slide 3: Explanation why it addresses this stage
Slide 4: Information Search Ad
Slide 5: Explanation why it addresses this stage
Slide 6: Evaluation of Alternatives Ad
Slide 7: Explanation why it addresses this stage
Slide 8: Product Choice (Purchase) Ad
Slide 9: Explanation why it addresses this stage
Slide 10: Outcomes (Postpurchase) Ad
Slide 11: Explanation why it addresses this stage
Slide 12: Conclusion
In the conclusion of the slide presentation choose which ad is most effective (overall) and why.
Logistics Run Down:
-No more than 18 slides in length (includes cover page and bibliography)
-Include a cover page and bibliography of sources. Outside sources (esp. learning resources from weeks covered) are encouraged to be cited and used.
-Organize and utilize the headings given above.
-No more than 2 grammatical/spelling errors are allowed (please proof before submitting).
-Text is required to be in Times Roman, 12 pt font, double space the text.
- Keep voice in business third person. Do not include visuals in text analysis, if need to add create an appendix and refer your reader to such.