Marketing1．Definition of marketingA.Official definition of AMA:The performance of business activities that direct the flow of goods and services from producer to consumer or user.B.Definition in text book: 4P：Product: the right product or servicesPlace: the products and services to the right people at the right place in the right timePrice: at the right pricePromotion: using the right promotional technique.2. Development of marketing philosophy and historical background (5 stages)A. production: availability and affordability, increase demandsB. product: quality and features, to produce enough is not enoughC. selling: focus on seller, equal quality improve selling skillsD. marketing: focus on buyer, the needs of target markets (we sell because you need it)E. societal: in a way that maintains or improves the consumer’s and society’s well-being.3. FranchisingA. Definition: a license to sell another’s products or to use another’s name in business, or both, is a franchise.B. advantages for franchiseea. instant recognitionb. management assistancec. financing assistanced. reduced failure ratesC. disadvantages for franchiseea. initial, ongoing and loyalty feeb. lost of independence and autonomy in the regimec. inhibit the development of small business (single proprietorships and partnerships)D. advantages and disadvantages for franchisora. advantages: Receive a shortcut to profits and brand recognition in chinab. disadvantages:Leadership (Management)1.Decision making: choosing one action over other possible actions (decision maker)End results often are used as criteria in evaluating a manger’s decision-making skills.Decision-making responsibility distinguish managers from nonmanagers(empowerment).Managers make decisions that determine the allocation of resources in order to move toward objectives translating plans into actions2.Planning: determining the future direction(objectives, the heart of planning) of anorganization (planner) and how to achieve them. Examine the past and predict the future, future-oriented.anizing: identifying the basic framework of formal relationships among tasks, activitiesand people in an organization. Gathering and allocating human and material resources to carry out plans (A. staffing- who should do that, B. purchasing materials, providing facilities,securing financing), intertwined with planning. Divide total work into specific jobs and among departments.4.Directing:A.Leader and motivator:guide others, understanding how people act and how to influencethem to act in desired ways.B.Change agent: one who change of an organization so that it remains effective.5.Controlling: one who ensures that an organization is being operated as planned. (monitorand controller) closely tied to planning- foundation.Corporate culture1.Definition: the set of shared values, norms of behaviors, policies and procedures that holdsand organization together.2.Factors influence corporate culture: national culture, ownership structure(sole proprietor,partnership and corporate) and industryHuman resources1.7 components of HR managementA.Recruitment: purpose to provide a large pool/group of candidates for managers to select thequalified. job analysis, position description, hiring specification(education, experience, skill) book p5-6B.Selection: using application forms, resumes, interviews, employment and skills tests andreference checks to evaluate and screen job candidates for managers who will select and hire them.C.Planning: two factors taken into considerationa.Internal factors: organization’s human resources needs(internal growth, merger andacquisition, departmental expansions and reductions, vacancies, current and expected skills needs)b.External factors: future economic environment(changing demographics(population, age,education), projected labor shortage, pressure from government, downsizing＆restricting＆reengineering)D.Orientation and socializationE.Training＆Developmenta. 4 procedures to determine individuals’ training needs: performance appraisal, analysis of jobrequirement, organizational analysis, employment surveyb.Two training approaches: on-the-job training(job rotation, internship, apprenticeship),off-the-job training (vestibule training, behaviorally experienced training, role-play)F.Performance appraisalG.Promotions, transfers, demotions, separations.2.Vestibule training: a form of training in which new employees learn the job in a setting thatapproximates as closely as is practical to the actual working environment. When the use of actual equipment by untrained employees would be too risky or when the actual work setting would be unconducive to learning (noise level)Finance1.Securities: an instrumentRepresenting ownership/ equity is stocksA debt agreement is bonds(creditor)The rights to ownership is derivativesDerivatives: a contract between two parties that specifies conditions under which payments are to be made (stock options, warrants), whose value is determined by fluctuations in the underlying assets, such as stocks, bonds, commodities, currencies, interest rates, market indexes.2.Differences between common stocks and preferred stocksCommon: voting rights, one vote per share, receive profits after all expenses.Preferred: issued after common, no vote,preference in distribution of earnings, a fixed rate of dividends and assets distribution right when out of business prior to common, no extra dividends except the fixed amount3.Termsa.Corporate charter:b.Bylaws:c.Liquid assets:d.Liquidate:e.Liquidation:f.Liquidity:g.Venture capital:financial capital provided to start-up firms with high risk but high growthpotential.h.IPO: a first-time offering of shares by specific firm to the public.i.Stock index: to monitor the overall level of stock prices.j.The composition of Don-Jones industrial average: based on the prices of the stocks of 30 major U.S. companies, General Motors, General Electric, Microsoft, Coca-Cola, AT＆T and IBM.4.In what ways can institutional investors influence corporation in comparism to individualinvestors (commonly exceeding 50%, typically small, ownership scattered, unable to monitor effectively and have substantial influence)?a.More voting power, more capable of enacting changes in the management andpolicies(through proxy contest)b.Better monitor (more experiences and resources)c.Collective sale or purchases affect stock marketInsurance1.Main types of insurance: depend on which type of undesirable event is insured. The mostcommon types are life insurance (death) and property and casualty insurance.2.Basic products of life insurance companies: life insurance proper, disability insurance,annuities and health insurance.3.Annuity: an insurance product that will help if you live longer than you expect. A financialcontract in the form of an insurance product according to which a seller(issuer) makes a series of future payments to a buyer(annuitant) in exchange for a lump-sum(single-payment annuity) or a series of regular payments(regular payment-annuity), prior to the onset of the annuity.4.How to make profits: charging premiums that are sufficient to pay the expected claims onthe company plus a profit. Invest them in interest-bearing securities such as deposit, stocks and bonds so as to generate more income.Funds1.Purpose and benefit of investing in mutual fundsDefinition of mutual funds: provide an outlet for the savings of individual investors, directing their funds into bonds, stocks, and money market securities.Benefit: continuous management services, greater price stability, reduced risks, opportunities for capital gains, indirect access to higher yielding securities that can only purchased in large blocks.2.Categorization of fundsa.Money market fundsb.New bond fundsc.Stock fundsd.Index fundse.Global fundsf.Venture fundsg.Hedge funds3.Why invest in money market funds?To skirt federal interest rate ceiling on time and savings deposits offered by banks and thrift institutions. Professional management of their liquid funds and reduced risk through diversification offered.4.What is Pension Fund?5.1.Functions of central banka.Control money supplyb.Stabilize money and capital marketc.Lender of last resortd.Maintain and improve payments mechanism2.Monetary control toolsa.Open market operation (selling and purchasing bonds on open market)b.Reserve requirement ( minimum amount of reserves that bank must hold against deposits)c.Discount rate (the interest rate on the loans that the Fed makes to banks, thus increase orreduce the quantity of reserves which will affect money supply)3.CPI: A measure of the average change over time in the prices paid by urban consumers for amarket basket (A subset of products that is designed to mimic the performance of an overall market. The goods are weighted according to their importance.) of consumer goods and services. Can be used to index (i.e. adjust for the effect of inflation) the real interest rate and the real value of wages, salaries, pensions, and for regulating prices.。