Marketing Strategies and Financial Concepts
Market Segmentation
Market segmentation is the process of dividing a market into smaller, uniform groups with similar characteristics and needs.
Segmentation Variables
The variables used for segmentation include:
- Geographical variables
- Demographic variables
- Psychographic variables
- Behavioral variables
Marketing Mix (4Ps)
Product/Service
A product (tangible or intangible) provides a market for purchase, use, or consumption, satisfying a need or desire. Products have a lifecycle influenced by consumer response and competition: Launch, Growth, Maturity, Decline.
Price
Price is the monetary amount associated with a transaction, determined by market research. It’s the only element of the marketing mix that generates revenue.
Place/Distribution
Place defines where the product or service is marketed to the consumer. Effective distribution channel management ensures the product reaches the right place at the right time and under appropriate conditions. Channels can be direct or indirect.
Promotion
Promotion communicates, informs, and persuades customers and stakeholders about the company, its products, and offers to achieve organizational objectives. The promotional mix includes sales promotion, personal selling, advertising, public relations, and interactive communication.
Strategic Marketing Functions
Strategic marketing involves listening to the market and detecting unmet needs to create desired products.
Operational Marketing Functions
Operational marketing manages marketing decisions and implements the marketing mix, including product, price, distribution, and communication.
Pricing and Strategies
What is Price?
Price is the monetary value assigned to a good or service, representing its worth in terms of money and other parameters like effort, attention, or time.
Factors Influencing Price
- Cost of manufacture
- Product quality
- Competition pricing
- Brand image
- Company profit goals
- Place of sale
- Demand fluctuations
- Geographic area and product differentiation
Pricing Strategy Definition
A pricing strategy is a long-term approach to setting the initial price for a product and guiding price movements throughout its lifecycle.
Types of Pricing Strategies
Skim-Pricing
Setting a high initial price for a new product to maximize profits from early adopters.
Penetration Pricing
Setting a low initial price to gain market share quickly.
Prestige Pricing
Setting high prices to attract status-conscious consumers.
Competition-Oriented Pricing
- Matching competitor prices
- Differentiating with higher prices
- Differentiating with lower prices
- Maintaining price relative to competitors
Product Portfolio Pricing
- Pricing for a product line
- Pricing for optional or complementary products
- Captive product pricing
- Package pricing
Geographic Pricing
Establishing agreements with buyers on shipping costs based on location. Options include factory pricing, freight absorption pricing, uniform delivered pricing, zone pricing, basing-point pricing.
Promoting New Markets
Strategies include 2-for-1 offers, discount coupons, gifts with purchase, quantity discounts, seasonal discounts, drawings, and contests.
Recruitment and Interviews
Internal Recruitment Advantages
- Lower cost
- Faster process
- Higher validity and safety
- Motivates employees
- Leverages training investment
- Fosters healthy competition
External Recruitment Sources
- Candidate files
- Advertisements
- Unions and professional associations
- Universities
- Other companies
- Recruitment agencies
Internal Recruitment Sources
- Personnel transfers
- Promotions
- Development programs
Position Profile Structure
- Job title and company
- Purpose of the position
- Hierarchy and reporting structure
- Contract type
- Requirements and functions
Types of Interviews
- Directed interview: Closed-ended questions.
- Free-form interview: Open-ended and improvised questions.
- Mixed interview: Combination of directed and free-form.
- Stress interview: Tests ability to handle pressure.
- Technical interview: Assesses specific skills and knowledge.
Interview Stages
- Greeting and welcome
- Informal chat
- Behavioral questions
- Final questions
- Farewell
Financial Concepts
Flat Tax
Calculated by applying a percentage discount to the difference between total tax and legal deductions.
Settlement
Formalizes the end of employment and associated benefits, requiring ratification and signatures before an authority.
Settlement Requirements
- Ratification and signatures
- Verification of identities
- Agreement on reserved rights
Settlement Information
- Worker and employer details
- Employment duration and termination details
- Stipends and benefits
- Reserved rights
Break-Even Analysis
Uses a variable cost approach, requiring fixed and variable cost data. It identifies the point where profit equals loss (sales equal cost).
Break-Even Point Applications
- Product analysis
- Investment analysis
- Company operations analysis
Break-Even Point Usefulness
Determines minimum profits, informs pricing, and helps establish margins.
Bonds
Long-term debt instruments issued by companies or governments, promising future payment with interest (coupon).
Stocks
Represent ownership in a corporation, granting economic and political rights to shareholders.
Cash Conversion Cycle (CCC)
Links payments and receipts, measuring the time from raw material purchase to finished product sale collection.
Inventory Conversion Period (ICP)
Time to convert raw materials into finished goods.
Receivables Collection Period (RCP)
Time to convert receivables into cash.
Payables Deferral Period (PDP)
Time between purchasing raw materials and making payment.
Life and Disability Insurance
Insurance provided by AFPs to cover disability and death risks of affiliates.
Cost Absorption
- If absorption inventory (II) equals variable inventory (IF), both approaches yield the same profit.
- If II is greater than IF, the variable costing method yields higher profit.
- If II is less than IF, the absorption costing method yields higher profit.
CCC Goal
Minimize the cycle without disrupting operations to improve profitability and reduce financing needs.
CCC and Cost
During the CCC, companies may need loans to cover expenses before receiving sales revenue.
Billing and Collection Policies
- Restrictive policy: Minimizes losses but may reduce sales.
- Flexible policy: Increases sales but also bad debt risk.
- Moderate policy: Balances credit flow and collections to maximize return on investment.
Bank Reconciliation Discrepancies
- Bank charges
- Check deposits and collections
- Document payments
- Bookkeeping errors
- Deposits in transit
- Outstanding checks
- Bank errors
Electronic Payments in Bank Reconciliation
Appear in both bank statement and company ledger.
Banking and Risk
- Accepting deposits: Selling risk of non-payment to depositors.
- Lending money: Buying risk of non-repayment from borrowers.
Time and Interest Rate
Longer terms generally imply higher risk and higher interest rates.
Common Interview Questions
- Tell me about yourself.
- What are your career goals?
- Why do you want to work for this company?
- What is your professional experience?
- Why did you leave your previous job?
- Why do you want to change jobs?
- Do you consider yourself a professional?
- Why do you want this job?
- What is your greatest weakness?
- What skills qualify you for this position?
- How would you describe yourself?