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BU121 Midterm Study Guide

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Wilfrid Laurier University
Laura Allan

B U 1 2 1 M i d t e r m R e v i e w G u i d e E d w i n a C h e u n g | 1 BUSINESS PLANNING (7 MARKS) TEXTBOOK – TEXT UNIT 1 (CHAPTER 8): WRITING AN EFFECTIVE BUSINESS PLAN (3 MARKS M/C) Benefits of Writing a Business Plan - Venture capitalists and other potential sources of funding generally require a formal business plan - Useful because doing so encourages capitalists to formulate goals and concrete plans for reaching them Model of Business Planning Develop a basic business planStart the businessRefine the plan using new infoContinue to grow as a business Components of a Business Plan Key Questions Answered - Who will want the product? Who are the people behind the venture? - What is it? - Why will people want it? - How will the venture be realized? How much money is needed? Characteristics of a Well-prepared Plan - Orderly - Succinct - Persuasive Critical Risks - Risks that prevent a venture from reaching its key objectives (competitors cut prices, change in industry trends, costs exceeding expectations, too optimistic sales projections) Milestones - What major activities will happen and when they will be achieved o Formal incorporation, completion of design/prototypes Seven Deadly Sins - The plan is poorly prepared and has an unprofessional look o Must not have any mistakes, must look neat and presentable - The plan is far too slick o Making it too fancy makes the investor wonder if the person is hiding something - The exec summary is too long and rambling o If the idea cannot be described succinctly, then it’s not worth the time o Doesn’t get right to the point - Product development stage/process is unclear - No clear identification of why anyone would want to buy the product/service - No clear qualifications of the management team - Financial projections are unreasonably optimistic and exorbitant LECTURE MATERIAL ART OF THE START – WEEK 1 (4 MARKS S/A) ‘Art of the Start’ 5 things an Entrepreneur Must Accomplish 1. Make meaning - Create something that will make the world a better place, it’s not about money or power - Defining meaning for the business will become your most powerful motivator and help you become more successful - With this well understood meaning, the business will have a firm direction 2. Make mantra - An verbal saying that your business is founded upon - Provides a core internal message that drives all company operations forward 3. Get going - Don’t wait for the perfect idea, start the business once you have enough information - By starting the business, you gain information - Use that information to refine the business, expand it and make it better 4. Define a business model - To see how all the factors of the business are integrated together - Helps you identify how you will generate revenue - Helps implement effective strategies and changes operating methods B U 1 2 1 M i d t e r m R e v i e w G u i d e E d w i n a C h e u n g | 2 5. Weave a MAT (milestones, assumptions, tasks) - Creates a schedule for what you’re trying to achieve and how to achieve them - Can uncover holes that would become problems in the future - Understand the scope of what you’re undertaking, test assumptions, develop a method to find and fix flaws Reasons for Writing a Business Plan - To get funding from potential investors o Investors want to see the business model to understand the thinking and know where their money is going into - Forces the founding team to work together o Forces them to be a team - Makes the team consider any issues that had been previously glossed over o Makes you consider things that you may have forgotten - Uncovers any holes in the founding team o Makes you realize there are things you don’t know BUSINESS COMMUNICATION (8 MARKS) TEXTBOOK – TEXT UNIT 2: BUSINESS WRITING (4 MARKS M/C) 4 Principles of Business Writing - Purposeful – will need to fulfill a purpose in each message that you write - Persuasive – want the audience to believe and accept your message - Economical – must present ideas clearly and concisely - Audience oriented – concentrate on writing the message from the perspective of the audience 3x3 Writing Process Step 1: Prewriting (thinking and planning) - Analyze, anticipate, adapt Step 2: Writing - Research, organize, compose Step 3: Revising - Revise, evaluate, proofread LECTURE MATERIAL MADE TO STICK – WEEK 2 (4 MARKS S/A) What is a Sticky Message? - Message that is understandable, memorable, stays with you, and is effective in changing thought or behaviour - If you make use of these 6 traits in your communication, you’ll make your ideas stickier 6 Principles of Stickiness (SUCCESs) – Why they affect stickiness, ways to achieve principles 1. Simplicity - A simple message is memorable and understandable, it sticks - Keep the message core and compact - Communicate the core by: o Using proverbs (simple but profound) o Using existing schema (existing knowledge, what already is in the person’s mind) o Using analogies (simplifies) o Using metaphors (generates a new perception) 2. Unexpectedness - Violates expectations by surprising the audience in an interesting way, captures attention and generates curiosity - Be counterintuitive (not common sense) o Open up gaps in their knowledge, give them some context that they’re familiar with, and fill those gaps 3. Concreteness - Makes ideas clear and stays away from being abstract - Use concrete images that the person will be able to relate or use familiar terms (imagery) 4. Credibility - Makes people believe the message - Use external credibility (authorities) o Celebrities, experts, and anti-authorities (normal people who have lived through it) B U 1 2 1 M i d t e r m R e v i e w G u i d e E d w i n a C h e u n g | 3 - Use internal credibility o Vivid details (more believable as they make things real), statistics, testable credential (you check it out, you experience it, go take a look) 5. Emotional - Making a person feel different can change their behaviour or attitude toward something - Makes the story relatable (appeal to self interest) - Use the power of association o Associate it to something they care about (appeal to self-interest) o Focus on the benefits they’ll get, not the features - Appeal to identity o If you can’t get a person to care, relate it to their identity and their ego 6. Stores - Use a story to inspire a person and this inspiration will lead to action - Generate inspiration by using certain plots o Challenge plot – up against a challenge and you overcome that o Connection plot – a human story that connects and bridges a gap in the person’s knowledge o Creativity plot – generate inspiration by showing massive mental breakthroughs Jared vs. “7 Under 6” - Simple: Eat subway and lose weight - Unexpected: Lost weight eating fast food - Concrete: See him thing with his old pants that he used to wear (fat) - Credible: Used anti-authority, guy who lived through it - Emotional: Life changing transformation - Story: Inspiring challenge plot, overcome weight problems with the help of Subway DISC & EMOTIONAL INTELLIGENCE (7 MARKS) LAB MANUAL READINGS (PAGES 118-135) – MAJOR CONCEPTS (5 MARKS M/C) - Emotional intelligence – a set of emotional and social skills that influence the way we perceive and express ourselves, develop and maintain social relationships, cope with challenges, and use emotional information in an effective and meaningful way - 4 corners model  empathy, assertiveness, impulse control, optimism - Impulse control is a primary skill upon which all other cognitive and emotional skills depend - Art of developing successful leadership is created by bringing the right skills together so leaders can experience a resilience that is sustainable even when tested - Four basic competencies (self-awareness, social awareness, self-management, social skills) influence the way people handle themselves and their relationships with others (Daniel Goleman) o Argued that these human competencies play a bigger role than cognitive intelligence in determining success in life and in the workplace - 5 general areas of emotional intelligence: intrapersonal, interpersonal, adaptability, stress management, and general mood - Highest EQ factors for CEO: independence, assertiveness, optimism, self-regard, self-actualization - Lowest EQ skills for CEO: impulse control, interpersonal relationship - Women CEOs scored higher compared to men in: interpersonal relationships, empathy, emotional self-awareness - 3 EQ factors that differentiated “superstar” CEO: empathy, self regard, assertiveness LECTURE MATERIAL – WEEK 3 (2 MARKS S/A) Difference between EI, IQ, and Personality - Personality – way you describe a person/what a person is like. Shaped and set by age 5. Can change minor components but not the core - EQ – street smart, emotional intelligence. It’s your emotional/social skills that influence how you act. Ability to use and understand the implications of emotions to influence others and promote personal growth and success. It grows with age. Key is to have balance, not a high score - IQ – books smart, fully developed by 17, cannot improve it. High IQ may not be successful in real world if they have poor EQ and lack self control and the ability to influence others. IQ does not and cannot predict success in life B U 1 2 1 M i d t e r m R e v i e w G u i d e E d w i n a C h e u n g | 4 Uses for EI in business - More successful hiring - Decreased attrition rates - Reduced training costs - Higher levels of productivity and success - Greater individual performance - Better leaders and managers - Stronger relationships with employees and customers - Reasoning is: o Ability to deal well with pressure, resolve conflict effectively Trust Model/Johari Window Basic Model of DISC 4 Personality Styles - Dominant, influencing, compliant, stable Axes (Active/Passive, Task/People) and Resulting Styles Major fears - D = being taken advantage of - I = rejection - S = loss of security - C = criticism CRITICAL THINKING (7 MARKS) LECTURE MATERIAL – WEEK 4/LAB MANUAL READINGS (4 MARKS M/C, 3 MARKS S/A) Claims What they are and how to find them - The major conclusion that the author is trying to persuade you to accept - Look for cue words: therefore, thus, in summary, I believe that, in short, as a result, etc How to evaluate as reader - Can either be contestable or uncontested - Uncontested: claims that generally don’t need to argued o Claims that coincide with our experiences o Facts or events o Areas in which there is a general agreement amongst experts o Common knowledge o Mathematical claims B U 1 2 1 M i d t e r m R e v i e w G u i d e E d w i n a C h e u n g | 5 How to apply to writing - Try to present the essence of what the author is saying in a clear and concise way - Can be more than one sentence for long texts which summarizes key concepts Evidence What they are and how to find them - Any statement that supports the claim - Look for cue words( as a result, in the first place, for example, given that, etc), statistics, charts, diagrams How to evaluate as reader (quality of evidence) - Accuracy: Making sure sources are good and overall writing is free of errors - Precision: Statistics or numbers to make it more precise and credible - Sufficiency: Is there enough evidence to back up the claim? - Representativeness: Evidence must represent the claim fairly and from an unbiased perspective - Authority: Is the source/author credible - Clarity: The significance affects the weight of the evidence How to apply to writing - Present arguments in form of claim and supporting evidence - Make sure you make it clear to the audience what the point of the evidence is Underlying Assumptions What they are and how to find them - A logical link that fills the gap between a piece of evidence and a claim - To find: identify what must be true between the evidence and the claim for the argument to exist How to evaluate as reader - Reality assumptions o Our beliefs on what events have taken place, what exists, or how things work in the world o Challenge by presenting information that shows the author’s notion of reality as debatable or just wrong - Value assumptions o Values are our ideals, our standards of right and wrong, the way things ought to be o Can be value conflicts because people have different values and rank them differently o Challenging these is difficult because values are rooted into a person early on in life and are resistant to change How to apply to writing - Make it clear that each evidence is relevant by articulating your underlying assumptions and reasoning explicitly - Question your assumptions, what made you think that way? Causal Claims What they are and how to find them - Certain events/factors (causes) are responsible for bringing about other events/situations (events) - Cause-and-effect relationships are the basis for decision making and reasoned action How to evaluate as reader - Does the cause-and-effect link have a rival causal relationship? - Difficulty in determining the link between cause-and-effect relationships arises from the fact that the outcome effect may have multiple causes - May be multiple or rival causal explanations due to: o Differences between groups, correlation between characteristics, post hoc ergo propter hoc fallacy (after this, therefore, because of this) How to apply to writing - Think them all though and address them explicitly - Don’t let others think that you ignored the rest Techniques of Persuasion - Must profile your audience and make sure you understand what they know, believe, value, and assume - Anticipate and counter objections o Put yourself in reader’s shoes and cover objections to your argument in your writing B U 1 2 1 M i d t e r m R e v i e w G u i d e E d w i n a C h e u n g | 6 - Negative evidence o Must address this negative evidence and show that it’s  Not actually a negative piece of evidence  It’s not reliable  Its importance is overstated - Limit your claims when you have no rebuttal - Use of rhetoric (art of using language to persuade) o Can use to make your reader feel anger, pride, fear, etc through word choice o Make sure to be complete, use appropriate tone and use vivid language - Rival causes o Brainstorm alternate causes, rebut them, and explain why they’re not - Debatable assumptions o Anticipate challenges to your assumptions and back them up with data if needed MARKETING (24 MARKS) TEXTBOOK – TEXT UNIT 3 (CHAPTER 12): UNDERSTANDING THE CUSTOMER (2 MARKS M/C) Marketing concept – involves identifying customer needs and then producing goods or services that will satisfy them while making a profit Customer Value & Satisfaction - Oriented toward pleasing customers by providing value - Marketing concept specifically focuses on: o Customer wants, so the organization can distinguish its products from its competitors o Integrating all of the organization’s activities, including production, to satisfy these wants o Achieving long term goals for the organization by legally and responsibly meeting these wants - Opposing marketing concept is production orientation where the focus was on lowering production costs and not satisfying customer wants and needs Building Relationships (relationship marketing) - A strategy that focuses on forging long-term partnerships with customers o Companies build relationships by offering value o Companies benefit from repeat sales and referrals - Customer relationship management (CRM) – tracking system o The processes that an organization uses to track and organize info regarding current and prospective customers o By building customer relationships, a small firm can focus on a small segment of the market with its employees and compete with large firms Types of Competitive Advantage - Cost competitive advantage – you can produce a product at a lower cost than all of your competitors while maintaining profit margins - Differential competitive advantage – when you provide something unique that is valuable to buyers beyond simply offering a low price - Niche competitive advantage –you target and effectively serve a single segment of the market within a limited geographic area Consumer Decision-making (refers to buyer behaviour which the actions people are taking when buying products) Process: all the influences such as cultural, social, individual, and psychological factors affect all steps 1. Need recognition 2. Information search 3. Evaluation of alternatives 4. Purchase 5. Post-purchase behaviour Influences - Culture: A set of values, ideas, attitudes, and symbols created to shape human behaviour. o Culture is environmentally oriented and it is social in nature. It is not static because it adapts to changing societal needs and evolving environmental factors B U 1 2 1 M i d t e r m R e v i e w G u i d e E d w i n a C h e u n g | 7 - Social: Consumers seek out the opinions of others to reduce their effort in the information search and evaluation of alternatives o Reference groups: All formal and informal groups that influence buyer behaviour.  Consumer look at how people in a reference group operate and base their consumption decisions off of their observations o Opinion leaders, generally a member in a reference group, are a person who influences others. These are the individuals who are the first to try new things because they are trend setters or are curious about the product o Socialization process: The passing down of cultural values and norms to children.  Children learn by observing parents, so they’ll tend to shop in a similar pattern - Individual: A buyer is also influenced by one’s personal characteristics such as gender, personality, and self-concept. These are generally stable over the course of an individual’s life o Personality: A way of organizing and grouping how an individual reacts to situations. It is a combination of psychological make-up and environmental forces.  Includes people’s underlying dispositions  Consumers sometime buy certain products which they perceive reflects their personality o Self-concept: This is how consumers perceive themselves  This includes attitudes, perceptions, beliefs, and self-evaluations  Self-concept can change but it is gradual and takes a long period of time  Ideal self-image: The way an individual would like to be  Real self-image: How an individual perceives themselves  People try to narrow the gap between real and ideal - Psychological: This is a person’s set of perceptions, beliefs, and attitudes. o Perception: How we see the world around us and how we recognize that we need some help in making a purchasing decision o Belief: An organized pattern of knowledge that an individual holds as true about their world. Through a set of beliefs, a consumer can develop a brand image of the company in their mind. This shapes the consumers attitude toward the product o Attitude: A learned tendency to respond consistently toward a given object, idea, or concept, such as a brand. These factors rest on an individual’s value system and because of this, they are more complex to deal with than beliefs Consumer Buying Decisions vs. B2B Decision Making Consumer Buying Decisions - Routine response behaviour: Purchase of low cost, frequently bought items with little search or decision making. These items include staples such as bread and milk. - Limited decision-making: Situation in which a consumer has previous product experience but is unfamiliar with the current brands available. - Extensive decision-making: Purchasing an unfamiliar, expensive, infrequently bought item. Consumers want to know as much as they can about a product before they purchase it because they want to make the right decision Business-to-business Decision Making - The key difference between a consumer product and a business product is the intended use. If a good is purchased for use in a business environment, then it is a business good. - Characteristics of the Business-to-Business market: o Purchase volume: Business customers buy in much larger quantities than consumers o Number of customers: There are fewer customers for business marketers than there are for consumer marketers. Much easier to monitor prospective buyers and their needs o Location of buyers: Business customers tend to be much more geographically concentrated than consumers - Direct distribution: Business sales tend to be made directly to the buyer because sales involve large quantities. Consumer goods are likely to be sold through intermediaries such as wholesalers and retailers Trends (COY SILO) - Category management – retailers taking supplied advice on how to stock the shelves to max sales - Outsourcing logistic functions – entire function of buying and managing transportation is outsourced to reduce warehousing, labour costs, etc B U 1 2 1 M i d t e r m R e v i e w G u i d e E d w i n a C h e u n g | 8 - Yield management – yield management systems help to adjust prices (i.e. discounting early purchases, etc) - Scanner based research – monitoring all the promotion, pricing and advertising that a consumer is exposed to - Internet marketing research - Loyalty cards – promotes repeat sales, frequency in customer traffic and allow companies to track purchase trends - One-to-one marketing – creating unique marketing mixes for individual customer (micro marketing) LECTURE MATERIAL – WEEK 4: UNDERSTANDING THE CUSTOMER (9 MARKS S/A) #1 Key to Successful Marketing - Marketing = an integrated system of activities designed to plan, price, promote and distribute want- satisfying goods and services to present and potential customers - The product must not only provide a particular benefit/satisfy a particular want or need, but it must be needed or wanted….. it must provide a unique benefit that the competition does not Steps to Locating a Target Market (Market segmentation, perceptual mapping, preference analysis) Market (benefit) Segmentation - Geographic – segmenting by region - Demographic – uses population data - Psychographic – market segmentation by personality of lifestyle - Volume – based on the amount of the product purchased - Benefits sought – based on what a product will do rather than on consumer characteristics Bases - State-of-being o Geographic (region, population size, population density, climate o Demographic (age, gender, lifecycle, income, occupation, education, religion, social class, etc) o Customer type (business, consumer) - State-of-mind o Psychographic (personality and lifestyle – AIOattitudes, interests, opinions) - Product usage o Volume (usage rate, user status, readiness to buy) o Sensitivity to market factors, occasions o Loyalty - Benefits sought o Reason for buying the product Process 1. Segment on basis of benefits 2. Describe using other bases 3. Name them last Perceptual Mapping/Preference Analysis - Perceptual mapping – map where customers perceive current products/brands to be located, based on the criteria the customers value most) - Preference analysis – using the information we know about what is already in the market, we can map the preferences of each market segmenation Process - Draw axes that represent the relevant dimensions by which people differentiate between product offerings - Locate the positions of competing products on the axes/dimensions according to customer perceptions (perceptual mapping) - Locate each segment’s ideal product (preference analysis) Choosing target marketing - Now determine the target market by choosing the segment in which the markets need have not been met by a competitor - Find the biggest gap between how the customer per
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