Sociology: The study of the development, structure, and functioning of human society.

Accounting: The process of recording financial transactions pertaining to a business.

Finance is a term for matters regarding the management, creation, and study of money and
investments.

Human resource management (HRM): the practice of recruiting, hiring, deploying and managing an
organization's employees.

1. Strategic plan (for entire organization)

2. Operational plan (for a specific part of that organization)

3. Short-term plan (less than a year)

4. Long-term plan (more than 3 years)

5. Specific plan (it provides clear cut directions and leave no room for interpretation)

6. Directional plan (provide general guidelines)

7. Single-use plan (one-time plan for unique natured problems)

8. Standing plan (repetitive nature plans for routine issues)

Management is the administration of organizations, whether they are a business, a nonprofit

organization, or a government body through business

Economics the study of how individuals and societies use limited resources to satisfy unlimited wants.

An economy is a complex system of interrelated production, consumption, and exchange activities

that ultimately determines how resources are allocated among all the participants

Economic resources: Land labor, Capital, organization/ rent, wages, interest, profit

Micro economics: Examines the functioning of individual industries and the behavior of individual
decision-making units- firms and households

Macro economics is the study of the behavior of the economy as a whole and the policy measures that
the government uses to influence it.

Marketing is engaging customers and managing profitable customer relationships

Maslow’s Hierarchy of Needs  Physiological Needs  Food, Clothing, Housing  Safety Needs 
Security, Protection  Social Needs  Sense of Belonging, Love  Esteem Needs  Self Esteem,
Status  Self Actualization (Self Development)
Classification from ‘Function’ point of view

Product cost (Manufacturing/Factory/Production cost): The cost of making a product like material,
labour, and production overheads.

Period cost (Non-manufacturing/Non-production cost): The cost which does not relate to production
and therefore is not charged to the product like selling/marketing & distribution costs and
administrative costs.

Classification from ‘Traceability’ point of view

Direct cost (Prime cost): A cost which is easily/fully/directly chargeable to a product or service like
direct material, direct labour, and direct expenses.

Indirect cost (Overheads): A cost which is not easily/fully/directly chargeable to a product or service
like indirect material, indirect labour, and indirect expenses.

Classification from ‘Behavior’ point of view

Fixed cost: A cost that remains unchanged within a range of activity or within a short period say a
year.

Step cost: A cost that remains constant up to a certain activity level, suddenly rises, and again
becomes constant up to another activity level.

Variable cost: A cost that directly changes with every unit of activity.

Semi-variable cost (Mixed cost): A cost that is composed of a fixed as well as a variable element.

Classification from ‘Controllability’ point of view

Controllable cost: A cost is controllable for a manager if he can influence it by his decision.

Uncontrollable cost: A cost is uncontrollable for a manager if he can’t influence it by his decision.

Costs from Decision-making point of view

Sunk cost: A cost which is already incurred before taking a decision.

Committed cost: A cost for which a commitment is made before taking a decision.

Differential cost: The difference in the cost of alternatives

Opportunity cost: The benefit from the second best alternative foregone/sacrificed in favor of the
best alternative.

Miscellaneous
Standard cost: A careful estimate of the per unit cost of a product/service.

Functional cost: The cost of performing a particular function.

Cost object(ive): Anything for which cost is desired by the management.

Cost unit: A unit of product or service for which cost is determined.

Responsibility centre: A department/function whose performance is the direct responsibility of a

specific manager.

Cost centre: A responsibility centre whose manager is accountable for costs only. Performance is
measured by the cost incurred.

Revenue centre: A responsibility centre whose manager is accountable for revenues only. Performance
is measured by the revenue earned.

Profit centre: A responsibility centre whose manager is accountable for costs as well as revenues.
Performance is measured by the amount of profit generated.

Investment centre: A profit centre whose manager has additional accountability for capital
investments. Performance is measured by return on investment (ROI).

Financial Management is concerned with investment, financing and asset management decisions with
some overall goal in mind.

Globalization, or globalisation, is the process of interaction and integration among people, companies,
and governments worldwide.

Marketing intelligence system: a set of procedures and sources that managers use to obtain everyday
information about developments in the marketing environment

Banking means the accepting for the purpose of lending or investing of deposits of money from the
public repayable in demand or otherwise and withdrawable by cheque, draft order or otherwise.

Roles of Manager

Role Description
Interpersonal
Figurehead Symbolic head; required to perform a number of routine duties of a legal or social
nature
Leader Responsible for the motivation and direction of employees
Liaison Maintains a network of outside contacts who provide favors and information
 Informationall
Monitor Receives a wide variety of information; serves as nerve center of internal and
external information of the organization
Disseminator Transmits information received from outsiders or from other employees to
members of the organization
Spokesperson Transmits information to outsiders on organization’s plans, policies, actions, and
results; serves as expert on organization’s industry
Decisional
Entrepreneur Searches organization and its environment for opportunities and initiates projects
to bring about change
Disturbance Responsible for corrective action when organization faces important, unexpected
handler disturbances
Resource Makes or approves significant organizational decisions
allocator
Negotiator Responsible for representing the organization at major negotiations

Skills

Technical Skills: The ability to apply specialized knowledge or expertise

Human Skills: The ability to work with, understand, and motivate other people, both individually and
in groups

Conceptual Skills: The mental ability to analyze and diagnose complex situations

Four types of managerial activity:

Traditional Management: Decision making, planning, and controlling

Communication: Exchanging routine information and processing paperwork

Human Resource Management: Motivating, disciplining, managing conflict, staffing and training

Networking: Socializing, politicking, and interacting with others

Organizational Behavior: A field of study that investigates the impact that individuals, groups, and
structure have on behavior within organizations, for the purpose of applying such knowledge toward
improving an organization’s effectiveness.
Stages of Strategic Management: Formulation, implementation and evaluation

Management Process?

Planning: This step is where you create a detailed action plan for your business goals with expected
results in mind (e.g., increased sales).

Organizing: This step involves arranging people, materials, machines, equipment and money to
achieve set objectives (e.g., organize human resources by team structure).

Leading: This step is about motivating people/workers to perform better at their tasks (e.g.,
encouraging workers through incentives such as bonus schemes).

Controlling: This step deals with measuring performance against corporate standards or targets set at
earlier stages.

Purpose of research: Exploratory, Descriptive and Explanatory.

Steps in research process: broader area of problem, preliminary data collection, problem definition,
theoretical framework, generating hypothesis, research design (which scales are to be used, how will
the data be collected), data collection/process/analysis, interpretation and report writing.

FACTORS AFFECTING INTERNAL VALIDITY

History Effects

Certain events or factors that would have an impact on the independent variable-dependent variable
relationship might unexpectedly occur while the experiment is in progress, and this history of events
would confound the cause-and-effect relationship between the two variables, thus affecting the
internal validity.

Maturation Effects

Cause-and-effect inferences can also be contaminated by the effects of the passage of time—another
uncontrollable variable. Such contamination is called Maturation effects.

Testing Effects

Frequently, to test the effect of a treatment, subjects are given what is called a pretest (say, a short
questionnaire eliciting their feelings and attitudes). That is, first a measure of the dependent variable is
taken (the pretest), then the treatment given, and after that a second test, called the posttest,
administered. The difference between the posttest and the pretest scores is then attributed to the
treatment. However, the very fact that respondents were exposed to the pretest might influence their
responses on the posttest, which would adversely impact on internal validity.
Instrumentations Effects

Instrumentation effects are yet another source of threat to internal validity. These might arise because
of a change in the measuring instrument between pretest, and posttest, and not because of the
treatment’s differential impact at the end.

Selection Bias Effects

The threat to internal validity could also come from improper or unmatched selection of subjects for
the experimental and control groups.

Mortality

Another confounding factor on the cause-and-effect relationship is the mortality or attrition of the
members in the experimental or control group or both, as the experiment progresses.

Integration Strategies

► Forward integration

► involves gaining ownership or increased control over distributors or retailers

► Backward integration

► strategy of seeking ownership or increased control of a firm’s suppliers

► Horizontal integration

► a strategy of seeking ownership of or increased control over a firm’s competitors

Intensive Strategies

► Market penetration strategy

► seeks to increase market share for present products or services in present markets
through greater marketing efforts

► Market development

► involves introducing present products or services into new geographic areas

► Product development strategy

► seeks increased sales by improving or modifying present products or services

Diversification Strategies

► Related diversification
 ► value chains possess competitively valuable cross-business strategic fits

► Unrelated diversification

► value chains are so dissimilar that no competitively valuable cross-business

relationships exist

Defensive Strategies

► Retrenchment

► occurs when an organization regroups through cost and asset reduction to reverse
declining sales and profits

► Divestiture

► Selling a division or part of an organization

► often used to raise capital for further strategic acquisitions or investments

► Liquidation

► selling all of a company’s assets, in parts, for their tangible worth

► can be an emotionally difficult strategy

Segment Marketing  Serving needs of a particular group; different marketing mix for different
segments. e.g. Vegetarian recipes in India

Niche Marketing  Marketing to a single group, tailoring the mix to their specific needs and attract
them e.g. Bran Breas, Diet Coke

Differentiated Marketing  Organizations sell multiple versions of a product; each appealing to

different market segment. Differentiated strategy can produce greater sales. e.g. Pepsi in 300ml as
well as 2 litres

 Individual Marketing  Tailoring market mix to suit individual customers and create value for each
individual. e.g. Designer clothes

Segmentation

Demographic: Age, Gender, Marital Status, Family Life Cycle and Income, Education and Occupation

Geographic
Psychological

 Motivation: Understand ‘why’ of consumer’s buying pattern. e.g. Why did ready to
eat food items are less successful in Pakistan?
 Desired Benefits: need and benefits various segments seek from the product. e.g.
Honda Civic: for convenience & comfort and Audi for status symbol
 Attitude: attitude towards brands give rise to distinct segments. (negatives,
functionalists, fun lovers etc. e.g. the ‘name bottle’ pack of Coke)
 Lifestyle: predict buyer behavior on the basis of attitude, interests andopinions (VALS
2). Colgate for trust and traditions
 Personality: one’s personality determines the kind of product and the image thus
associated e.g. Reid & Tailor- corporate image, Peeru Clothing in Pakistan
 Brand Loyalty: measure of customer attachment to a particular brand. They prefer a
particular product irrespective of thick and thin e.g. Nestle
 Behavior: emotional and cognitive process going on inside a consumer’s head, lead to
many problems. Segmenting the market based on specific behavior patterns and
product use. E.g. while travelling in a train most people buy magazines who otherwise
do not buy
Socio-cultural Segmentation

 Family Life Cycle: All families pass through phases of formation, growth and
dissolution. At each stage, requirements vary and hence becomes an important
segment to be captured. (Suzuki Mehran is the first car of most families)
 Social Class: relative status and social standing is important to consumers. It is a
function of income, education and occupation. Knowledge of buying patterns,
behavior etc. is important to appeal to different segments (J.)
 Culture, Cross Culture & Sub culture: segmenting the domestic and international
markets on the basis of cultural heritage as members of the same culture share same
values, beliefs and customs. Within the larger culture distinct subgroups and
subcultures are united by certain experiences, values or beliefs and make effective
segments. Culturally different segments
Purchase Segmentation

Usage rate: segmenting based on the rate of product usage. Division of market into heavy, moderate
and light users and planning the marketing mix differently for each. e.g. ‘Frequent Flyer’ scheme of
airlines

Loyalty status: consistency with which consumers continue to buy same brand of a particular product
and show their commitment. e.g. ‘Loyality Cards’ offered by retail stores.

User status: whether consumers have used the product in past, use it currently or are likely to use the
same in future. Different mix could be needed for each category. e.g. Upgrade your Molty Foam
Mattress, return the old one and buy a new one at discount.

Consumption Specific Segmentation

 Usage Rate: Usage rate is often based on whether a group of consumers are heavy,
medium, light, or nonusers of a product
 Usage Situation: Segmenting on the basis of special occasions or situations
 Benefit Segmentation: Benefits that represent consumer needs
 Perceived Brand Loyalty: Brand loyalty includes the behavior to the brand – how
often somebody purchases the brand, in addition to the attitude or feeling the
consumer has to a brand
 Brand Relationship:
Implementing segmentation Strategies

Concentrated marketing usually involves only one segment, whereas a differentiated marketing
strategy is targeting several segments with individual marketing mixes

Differentiated marketing is usually used by financially strong companies that are well established in
their market sector

Counter Segmentation involves combining existing segments for a company to become more efficient
and profitable

Types of B2B Jobs

• Trade selling – increase business by providing customers with merchandising and

promotional assistance

• Missionary selling – persuade customers to buy products from distributors or other

wholesale suppliers
 • Technical selling – increase business from by offering current customers
technical/engineering assistance

• New business selling – identify and obtain business from new customers

A brand is a perception, often imbued with emotion, which results from experiences with and
information about a company or a line of products.

National Income: Total market value of final goods and services produced in a country during one
year is called national income.

Gross National Product: is the total market value of all final goods and services produced during a
period of one year.

Net National Product: if we subtract depreciation allowance or replacement cost of machines from
GNP, we get NNP.

Gross Domestic Product: total market value of all the final goods and services produced within a
country during a year is called GDP.

National Income: It is the income which is the aggregate of net rewards of four factors of production
e.g., rent, wages, interest and profits.

Personal Income: it is the income which a person individually earns in a year.

Transfer of payments: are the amounts of money which a person gets without labor like donations,
scholarships and pensions etc.

Disposable Personal Income: the income in the possession of a man after the payment of direct taxes
is called disposable personal income.

Business cycle: slump-recovery-boom-recession

Market Arenas: Good and Services, Labor, Money market

Fiscal Policy: Government

Monetary Policy: State Bank

A brand’s value proposition is the set of benefits or values it promises to deliver to customers to
satisfy their needs

Marketing Strategies
The production concept holds that consumers will favor products that are available and highly
affordable

The product concept holds that consumers will favor products that offer the most in quality,
performance, and innovative features

The selling concept holds that consumers will not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort

The marketing concept holds that achieving organizational goals depends on knowing the needs and
wants of target markets and delivering the desired satisfactions better than competitors do

The societal marketing concept questions whether the pure marketing concept overlooks possible
conflicts between consumer short-run wants and consumer long-run welfare

A vision statement is a business document that states the current and future objectives of an
organization.

A mission statement is a statement of the organization’s purpose; what it wants to accomplish in the
larger environment

Microenvironment consists of the actors close to the company that affect its ability to serve its
customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and
publics

Macroenvironment consists of the larger societal forces that affect the microenvironment—
demographic, economic, natural, technological, political, and cultural forces

Psychology is the scientific study of the mind and behaviour.