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RSM100Y1 Study Guide - Final Guide: Canada Deposit Insurance Corporation, Money Market Fund, Competitive Advantage

Rotman Commerce
Course Code
Michael Szlachta
Study Guide

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Marketing I
The Marketing Environment
○ Sociocultural
○ Competitive
○ Economic
○ Global
○ Technological
Market Segmentation
Consumer (B2C) Markets
■ Geographical
■ Demographic
■ Product-Related
■ Psychographic
Business (B2B) Markets
■ Geographical
■ Demographic
■ End-Use
Marketing II
Developing a Total Product Offer
Everything a consumer evaluates when deciding to buy a good (tangible and
Product Lines and Mix
A product line is a group of items that are physically similar or are intended for a
similar market
The product mix is the combination of product lines offered by a manufacturer
● Packaging
Changing the packaging can enhance the product
The package can make the product more attractive to retailers
Packing helps the customer choose between competitive offerings
Packaging protects the product in transit
Service can also be packaged
Branding and Brand Equity
○ Trademark
Brand equity
Brand loyalty
Brand awareness
Pricing Objectives in the Marketing Mix
○ Profitability
○ Volume
Meeting competition
○ Prestige
Major Approaches to Pricing
Cost-based pricing - producers often set the price based on the profit margin
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Demand-based pricing - estimate the selling price people are prepared to pay
for a product and then subtract the desired profit margin
Competition-based pricing - prices are set at, above or below what the
competition is charging
Other Pricing Strategies
○ Skimming - set the price high to maximize profits while there is no competition
Penetration Strategy - set the price low to attract customers and discourage
competitors from entering the market
Everyday Low Pricing - prices usually set lower than competitors
High-low Pricing - higher prices but many sales
○ Bundling - grouping two or more products and selling as one unit
Psychological Pricing - setting price points that appear less expensive
Price Leadership - one firm dominates the industry, sets the price and all others
Retail Distribution Strategy
Intensive - puts products in as many retail stores as possible
Selective - uses a preferred group of retailers
Exclusive - use of only one retail outlet in a geographical area
The Promotion Mix
○ Advertising
Personal selling
Public relations
Sales promotion
○ (Sponsorships)
Accounting I
Accounting Information Supports Decisions
○ Managers - financial reports pinpoint problems/opportunities
○ Government - assists with tax collection
Investors, Suppliers, & Creditors - provides a means to analyze business
Areas of Accounting
Managerial Accounting - internal focus - can be forward looking
Financial Accounting - external focus - backward looking
Types of Accountants
○ Public
■ Auditing
Tax Consulting and Compliance
Management Consulting
○ Private
Management Accounting
Government Accounting
■ Academia
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Bookkeeping vs. Accounting
○ Bookkeeping
Start of accounting
■ Record/journalize
○ Accounting
■ Analyze
■ Recommend
The Accounting System
Inputs Accounting Documents
○ Processing
Outputs Financial Statements
Steps in the Accounting Cycle
Analyze source documents
Record transactions in journals
Post journal entries to ledger
Prepare a trial balance
Prepare financial statements
Analyze financial statements
Accounting Equation
Assets = Liabilities + Owner’s Equity
Owned = Owed + Owner’s Claims
Liquidity Ratios
Current ratio = current assets / current liabilities
Quick (Acid-Test) Ratio = (current assets - inventory) / current liabilities
Quick (Acid-Test) Ratio = (cash + marketable securities + receivables) / current
Long Term Solvency Ratios
Debt to Equity = total liabilities / total equity
Profitability Ratios
Profitability = operating success
Return on Sales = net income / net sales
Earnings per Share = net income / # of shares
Return on Equity = net income / owners’ equity
Activity Ratios
Inventory Turnover = cost of goods sold / average inventory
Accounting II
Cost Principle
Assets or services should initially be recorded at their actual cost
Revenue Recognition
Revenue should be recorded when it has been earned
Matching Principle
Expenses should be matched with revenue - i.e. recognized in the same period
that related revenue is recorded
“Cooking the Books”
Early recognition of revenue
Late recognition of expenses
Inadequate reserves for bad debts, returns, and liabilities
Changing inventory valuation (Methods - 1 Time Boost to Income)
Phony transactions with partnerships
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