Finance- understanding cost, revenue and profit for a business Essay Example

Finance Finance- understanding cost, revenue and profit for a business Essay Finance- understanding cost, revenue and profit for a business Essay In accounting, costs are the monetary value of expenditures for supplies, services, labour, products, equipment and other items purchased for use by a business or other accounting entity. Here are some of the costs a business needs to know: * Fixed * Start-up cost : * Variable * Total * Marginal * Semi-fixed costs * Direct costs * Indirect costs * Average * Operating costs Fixed costs These costs do not change however many units of a product are made. Factory rent, insurance premiums and administration salaries stay the same, whether the factory is working at full capacity or producing nothing. The owner of the business may have taken out a loan to buy equipment or refurbish a building. The loan will have to be repaid whether or not the business has customers. Variable costs Variable costs change as output changes. For example, the amount of raw materials needed varies as the levels of output go up or down. Piece-work wages also fluctuate, depending on the employees efficiency and the demand for the companys products. Start- up costs These are incurred before a business begins to operate, such as the purchase of land, building and equipments. Total costs The fixed costs and the variable costs are added together to establish the total costs. The fixed costs remain constant, but the variable costs increase in direct proportion with output. Marginal costs Using marginal cost is a way of measuring how much more it will cost a company to make one more individual item. Semi-fixed costs Semi-fixed costs are costs which only change when there is a large change in output. For example, costs associated with buying a new machine to cope with increased production. Also telephones and electricity for instance have a fixed and variable element: a standard line rental and then a charge for each call/unit of electricity after that. Direct costs Direct costs are costs which can be identified directly with the production of a good or service; e.g. raw materials. Indirect costs Indirect costs are costs which cannot be matched against each product because they need to be paid whether or not the production of good or services takes place; e.g. rent on the premises. Classification of costs help allocate costs to right parts of the profit and loss account and also helps analysis of the break even point of the business. Average costs The example of the CD shows the benefits of economies of scale, where mass production results in a lower unit cost. The reason is that the fixed costs do not change and are spread across a greater level of output. Finding out the average cost of production helps a firm to monitor its progress, and makes it easier to set prices. It is calculated by dividing total cost by total output. Using the example of the compact disc firm above: Total costs / Total output = Average cost of production à ¯Ã‚ ¿Ã‚ ½1,000 / 100 CDs = à ¯Ã‚ ¿Ã‚ ½10 per CD This might seem expensive, but if the firm produces another hundred units at a marginal cost of à ¯Ã‚ ¿Ã‚ ½1.00 per CD, its average cost will fall radically: Total costs / Total output = Average cost of production à ¯Ã‚ ¿Ã‚ ½1,100 / 200 CDs = à ¯Ã‚ ¿Ã‚ ½5.50 per CD The firm can use this information to decide whether it is worth accepting a new order for goods. Operating costs Variables costs and fixed costs added together are known as operating or running costs since they are both incurred when a business is running. Revenue In business, revenue or revenues is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. Sales these are the main source of revenue for most organisations because customers pay for the goods or services they buy. Leasing a part of a building to another business can also provide a source of income. Some businesses specialise in leasing cars or equipment to other organisations. Interest this earned when a business has no money in an interest bearing accounts at the bank. Calculating total revenue To do this we need two items of information: * The selling price * The number sold We then need use the following formula: Profit Profit generally is the making of gain in business activity for the benefit of the owners of the business. Profit is the difference between the income of the business and all its costs/expenses. It is normally measured over a period of time. Profit is important in three ways: 1. It rewards the business people who have taken risks to run it 2. It provides the funds to develop the business further 3. It is a source of cash, which allows the business to meet its debts Gross profit This is the difference between sales income and the direct costs of making those products. Gross profit is used as a performance indicator to help the business make decisions over its pricing policies and use of materials. In the example, the business had sales of à ¯Ã‚ ¿Ã‚ ½18,000 over the year. Its cost of sales was à ¯Ã‚ ¿Ã‚ ½4,850 and its gross profit, therefore, was à ¯Ã‚ ¿Ã‚ ½13,150. Trading Account for Filling Snacks for year ended 31 December, 2000 à ¯Ã‚ ¿Ã‚ ½ à ¯Ã‚ ¿Ã‚ ½ Sales 18,000 less Cost of Sales Opening Stock 750 Purchases 5000 Closing Stock (900) (4,850) Gross Profit 13,150 Net profit Net profit represents gross profit less all expenses associated with the normal running of the business. Net profit shows how well the business performs under its normal trading circumstances. It is used to calculate the primary efficiency ratio. Net profit is the final profit of the business. It is the amount of profit made by the owners of the business at the end of the period. In this Example when we take expenses into account, we can see that what was a gross profit of à ¯Ã‚ ¿Ã‚ ½13,150 is now a net loss of à ¯Ã‚ ¿Ã‚ ½1,650. Trading and Profit Loss Account for Filling Snacks for year ended 31 December, 2000 à ¯Ã‚ ¿Ã‚ ½ à ¯Ã‚ ¿Ã‚ ½ Sales 18,000 less Cost of Sales Opening Stock 750 Purchases 5,000 Closing Stock (900) (4,850) Gross Profit 13,150 less Expenses Rent 10,000 Interest Payments 1,800 Light Heat 1,500 Advertising 500 Other 1,000 (14,800) Net Profit (1,650) Retained profit Retained profit is the profit left over after the shareholders have been paid their dividends. Retained profit is normally reinvested in the business. Profit is important to a business because it is a reward to the owners of the business. They have taken risks with their money and time. If there was no profit, then there would be little point in starting up or putting more money into the business, they might as well put the money into a bank or building society Profit maximization Profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. There are several approaches to this problem. The total revenue total cost method relies on the fact that profit equals revenue minus cost. There are two basic ways of improving profits: * Increasing sales income * Reducing running costs Increasing sales income There are different ways of trying to achieve this. They all have risks as shown in the charts. Methods Risks Increase prise Sales could fail Reduce prices to increase sales Not enough extra sales would be made to compensate Reducing operating costs We already know that cost fall in to two variables and fixed. Many business have operating cost like bills, labours, raw materials etc. An example of reducing operating profit is given below, a valeting business have a list which begins: Staff wages à ¯Ã‚ ¿Ã‚ ½200,000 Property rental à ¯Ã‚ ¿Ã‚ ½50,000 And end with Ball pens à ¯Ã‚ ¿Ã‚ ½20.00 Paper clips à ¯Ã‚ ¿Ã‚ ½4.50 Method of reducing costs falls into main categories: * Minimising usage * Finding the best purchase deal Item Use less Reduce purchase price Labour Reduce staff levels by increasing number of automated or computerised operations Increase productivity sub-contract work to cheapest bidder Raw materials Use fewer materials in product Look for a cheaper supplier Gas, water and electricity Replace older item with efficient ones, e.g. Energy- saving bulbs, light which turn off automatically. Switch utility company if this would reduced costs Consumable items, e.g. stationary Send documents by e-mail rather than by post. Shop around for cheaper suppliers and investigate online source The importance of profit After tax is paid the business can spend the remaining money in several ways. If the business is a limited company with shareholders, some of the profits will be paid as dividends. These are the rewards paid to shareholders for investing their money- similar to the interest you if you save money in the bank.

The History of Chemical Explosives

The History of Chemical Explosives An explosion can be defined as the rapid expansion of a material or device that exerts a sudden pressure on its surroundings. It can be caused by one of three things: a chemical reaction that occurs during conversion of elemental compounds, a mechanical or physical impact, or a nuclear reaction on the atomic/subatomic level. Gasoline exploding when ignited is a chemical explosion brought about by the sudden conversion of a hydrocarbon to carbon dioxide and water. The explosion that occurs when meteor strikes the earth is a mechanical explosion. And a nuclear warhead explosion is the result of the nucleus of a radioactive substance, like plutonium, suddenly splitting apart in an uncontrolled fashion. But it is chemical explosives that are the most common form of explosives in human history, used both for creative/commercial and destructive effect. The strength of a given explosive is measured that the rate of expansion it exhibits during detonation. Lets look briefly at some common chemical explosives. Black Powder It is unknown who invented the first explosive black powder. Black powder, also known as gunpowder, is a mixture of saltpeter (potassium nitrate), sulfur, and charcoal (carbon). It originated in China around in the ninth century and was in wide use throughout Asia and Europe by the end of the 13th century. It was commonly used in fireworks and signals, as well as in mining and building operations. Black powder is the oldest form of ballistic propellant and it was used with early muzzle-type firearms and other artillery uses. In 1831, William Bickford an English leather merchant invented the first safety fuse. Using a safety fuse made black powder explosives more practical and safer. But because black powder is messy explosive, by the end of the 18th century it was replaced by high explosives and by cleaner smokeless powder explosives, such as what is currently used in firearm ammunition. Black powder is categorized as a low explosive because it expands and subsonic speeds when it detonates. High explosives, by contract, expand as supersonic speeds, thereby creating much more force. Nitroglycerin Nitroglycerin is a chemical explosive that was discovered by Italian chemist Ascanio Sobrero in 1846. It was the first explosive developed that was more powerful than black powder, Nitroglycerin is a mix of nitric acid, sulphuric acid, and glycerol, and it is highly volatile. Its inventor, Sobrero, warned against its potential dangers, but Alfred Nobel adopted it as a commercial explosive in 1864. Several serious accidents, however, caused pure liquid nitroglycerin to be widely banned, leading to Nobels eventual invention of dynamite. Nitrocellulose In 1846, Chemist Christian Schonbein discovered nitrocellulose, also called guncotton, when he accidentally spilled a mixture of potent nitric acid on a cotton apron and the apron exploded as it dried. Experiments by Schonbein and others quickly established a means of manufacturing guncotton safely, and because it had a clean, explosive power almost six times greater than black powder, it quickly was adopted for use as means for propelling projectiles in weapons.   TNT In 1863, TNT or Trinitrotoluene was invented by German chemist Joseph Wilbrand. Originally formulated as a yellow dye, its explosive properties were not immediately evident. Its stablity was such that it could be safely poured into shell casings, and in the early 20th century it came into standard usage for German and British military munitions. Considered a high explosive, TNT is still in common use by the U.S. military and by construction companies around the world.   Blasting Cap In 1865, Alfred Nobel invented the blasting cap. The blasting cap provided a safer and dependable means of detonating nitroglycerin. Dynamite In 1867, Alfred Nobel patented dynamite, a high explosive that consisted of a mixture of three parts nitroglycerine, one part diatomaceous earth (ground silica rock) as an absorbent, and a small amount of sodium carbonate antacid as a stabilizer. The resultant mixture was considerably safer than pure nitroglycerine, as well as being much more powerful than black powder. Other materials are now used as the absorbent and stabilizing agents, but dynamite remains the premier explosive for use in commercial mining and construction demolition. Smokeless Powders In 1888, Alfred Nobel invented a dense smokeless powder explosive called ballistite. In 1889, Sir James Dewar and Sir Frederick Abel invented another smokeless gunpowder called cordite. Cordite was made of  nitroglycerin, guncotton, and a petroleum substance gelatinized by addition of acetone. Later variations of these smokeless powders form the propellant for most modern firearms and artillery. Modern Explosives Since 1955, a variety of additional high explosives has been developed. Created mostly for military use, they also have commercial applications, such as in deep drilling operations.  Explosives such as nitrate-fuel oil mixtures or ANFO and ammonium nitrate-base water gels now account for seventy percent of the explosives market. These explosives come in various types including: HMXRDXHNIWONC

Corporate finance Essay Example | Topics and Well Written Essays - 2000 words - 4

Corporate finance - Essay Example Breakavia is a newly formed country. The country has been formed recently by splitting from earlier communist states. The newly formed government of this country has recognised that there are many advantages in developing a democratic country and forming capital principles to regulate the country. Government also identified that the country has enough natural resources like oil and mineral reserves and therefore, it can functions as an independent state depending upon these huge natural resources sufficient for sustainable development of the country. As a newly developed country, the government thinks to invite the European multinational companies to enter to this market and use the natural resources which lead to overall development of the country in terms of many areas like economic development and employment and many more. For this purpose, the finance department of the country has decided to develop a standard tax regime and banking systems which will provide low cost finance for commercial and domestic housing development opportunity for developing tourism industry in the country. The government is also aiming to setting up Stock Exchange in Heeritis, the capital of this newly formed country. Therefore, to develop corporate sectors consists of domestic as well as foreign companies; the government is seeking corporate financial advice regarding development of a standardised corporate reporting for regulating businesses sector in the country. For this purpose, the finance minister of this country needs advice regarding two important areas of corporate finance. First, advice for standardised corporate reporting development by adopting any existing international standardised financial reporting. Second is importance of corporate governance in business and as an important part of annual corporate report the companies. International Accounting Standard

Communication questions Essay Example | Topics and Well Written Essays - 500 words

Communication questions - Essay Example Creation of external conditions in invitational rhetoric provides an avenue where the rhetor is open to external ideas. The audience provides the rhetor with external ideas through open sharing and discussion of ideas through one on one interaction. This interaction ends when both parties reach a common understanding. 1. Confidence and organization of materials for presentation are important credibility factors. Confidence demands that one is articulate in bringing out their ideas. Confidence during presentation shows that one has the necessary knowledge and expertise in the subject. Proper organization of materials ensures proper presentation. The audience is always keen during the presentation and they look to find errors. Meaningful transition from one material to another is perceived to be a factor of credibility. 2. An organizational pattern helps an organization to have a clear and concise outline of how to achieve its goals. The pattern should be able to make sense to the reader for easy understanding of the information. A sequential organizational pattern can be used to provide step by step information for a particular process. 3. During my presentation, the introduction should be based on self-introduction and my subject of presentation. The conclusion will be a summary of the main points. Introduction is about self –introduction, introduction of subject, how the presentation will be, and an outline of what I expect from the audience. Introduction helps to gain the attention of the audience. The conclusion helps in creating a lasting impression on the audience in regard to the quality of you work. 4. For effective elaboration I could apply the use of diagrams, use power point presentation, engage the audience through discussions, and through innovative presentation ideas and concepts. Visual diagrams help the audience develop a clear picture of the subject of presentation. Power point presentation helps

Marketing Needs And Challenges Of Small Businesses Marketing Essay

Marketing Needs And Challenges Of Small Businesses Marketing Essay Introduction This essay deals with the marketing needs and challenges of small businesses, with particular regard to the differences in these areas between small and big firms. Small businesses are steadily increasing their contribution to the economies of the developed nations. Small and medium enterprises (SMEs) currently provide employment to more than 33% of the UK labour force and account for just about less than 50% of the countrys total private sector business turnover (Longenecker, et al, 2005). The small sector is for all practical purposes driven by the energy, motivation, and drive of entrepreneurial owners, rather than by the abilities and skills of appropriately educated and trained professional managers (Odaka Sawai, 1999). Small business owners are driven to establish their organisations by reasons like entrepreneurial zeal, the desire for independence in working and decision making, craving for wealth, and the need to exploit original and innovative ideas and concepts for products and services (Odaka Sawai, 1999). Such entrepreneurs play vital roles in the economies of their nations, assume various operational and financial risks, and face difficult business challenges in their quest for business success (Odaka Sawai, 1999). One of their most important challenges lies in the area of marketing. All businesses need to successfully sell their products and services to customers in order to achieve business success and competitive advantage, and small businesses are no exception to this rule (Pelham Clayson, 1998). Whilst marketing success is imperative for the operational and financial success and growth of small and entrepreneurial firms, such organisations face numerous complex and difficult challenges in the pursuit of such objective (Pelham Clayson, 1998). The marketing environments and challenges of small firms are significantly different from those of larger organisations. Such differences arise on account of various reasons like product range, geographical distribution, pricing considerations, customer segmentation, and availability of funds (Pelham Clayson, 1998). Much of the success of the owners of small enterprises stems from their ability to recognise and overcome such challenges and formulate appropriate and effective marketing plans and strategies for their products and services (Pelham Clayson, 1998). This essay examines the important differences between the marketing challenges and options of small and big firms, the various dimensions of the marketing environments of small firms and the various challenges they are likely to encounter in the course of their business. The study also investigates the ways and means that can be used by small organisations to effectively market their products and services, and attempts to recommend the best ways and means for small entrepreneurs and business owners to improve the effectiveness of their marketing efforts and enhance their competitive advantage. The Importance of Marketing for Small Businesses The establishment and growth of small businesses is driven by the zeal and enthusiasm of individual entrepreneurs (Odaka Sawai, 1999). These individuals wish to develop and build independent enterprises and often feel that they have product or service with unique and specific attributes that will appeal to customers (Odaka Sawai, 1999). Such entrepreneurs are characterised by their optimism, enthusiasm and belief and conviction in their ideas, as also by their confidence in their ability to achieve their objectives. They however operate with numerous constraints that stem from factors like scarcity of physical and financial resources, limited workforce, absence of experienced and specialist executives, and lack of established markets (Casson, et al, 2006). Few, if any of these entrepreneurs establish new organisations with firm and ready customers. Even operating small businesses work in similarly difficult and challenged circumstances (Casson, et al, 2006). Whilst it is undoubtedly appreciated by all small business owners that the ultimate operational and financial successes of their enterprises, as also the maintenance and enhancement of competitive advantage, is significantly dependent upon their marketing sales performance, very few of such business people are able to effectively locate, focus upon, and exploit market opportunities through the formulation and execution of appropriate marketing strategies (Sadler-Smith, et al, 2003). The intentions and plans of small entrepreneurs and business owners to enhance their marketing effectiveness and sales performance are constrained by numerous challenges and obstacles, some of which occur because of internal weaknesses and others on account of environmental circumstances (Sadler-Smith, et al, 2003). Small and large businesses differ in numerous ways. Large businesses, even if they are recently established, are supported with strong financial resources from individual stockholders and financial institutions (Voss, et al, 2002). Other established and older large businesses furthermore have numerous organisational strengths that stem from extensive and developed production facilities, high quality organisational talent, research and development abilities and expertise, access to specialist advisers and consultants, extensive product range, established working processes for maintenance and improvement of quality, economies of scale, greater market reach, operations in different geographic locations, established market name and image, and well known brands (Voss, et al, 2002). Whilst all large organisations may not possess all these strengths and attributes, it is difficult to conceive many of them would have achieved significant growth in size and scale and still continue to be without many of these features (Welsch, 2003). Such strengths and attributes combine to provide large organisations with exceptional marketing advantages in terms of existing customer base, strong customer relationships, greater range of products and services, good product quality, attractive pricing, geographical reach, and brand recall (Welsch, 2003). Small businesses are comparably disadvantaged on many fronts (Weinrauch, et al, 1991). Most of them have restricted product ranges and whilst their operational costs are lower than those of larger businesses, they are unable to access economies of scale and sustain prices that are truly competitive and attractive (Weinrauch, et al, 1991). Such businesses also suffer from lack of uniform and appropriately designed working processes and quality control procedures, which often result in the generation of products and services of variable and occasionally doubtful quality (Weinrauch, et al, 1991). The absence of skilled management talent compels the owners of such businesses to personally supervise numerous and varied operations and makes it difficult for them to truly focus on marketing requirements, strategies and plans (Weinrauch, et al, 1991). This often results in ad hoc or inappropriately formulated and implemented marketing initiatives (Welsch, 2003). The lack of financial resourc es on the other hand constrains such businesses from engaging in expensive advertising and brand building strategies (Welsch, 2003). Such constraints, singly and jointly, make it extremely challenging for small firms to compete effectively in the market place, not just with larger competitors, but also with the many small firms that clutter most business sectors that do not ask for substantial investment of capital, technology or other resources (Welsch, 2003). Whilst small businesses, when compared to large businesses, do suffer from numerous internal and external disadvantages, which in turn challenge their marketing and sales efforts, they also have certain attributes that can, if effectively used, help them in the market place (Casson, et al, 2006). With small businesses largely being owner driven and having short chains of command, their decision making processes are often significantly faster than those of large businesses (Casson, et al, 2006). This enables them to be much more nimble in the market place and enables them to respond swiftly to marketing and customer needs (Casson, et al, 2006). The major strength of small businesses emanate from their owner managers, the majority of whom are entrepreneurial in nature and possess a number of traits that can help their organisations in various ways in the market place. Douglas Griest, (2010), found in the course of a review of 23 studies on comparisons of large organisation managers wit h small company entrepreneurs that such entrepreneurs were more likely to be creative, innovative, and open to new ideas than managers of larger organisations (Griest, 2010). Griest also found that entrepreneurs were expected to be more confident, tough, demanding, driven by needs for achievement and recognition, and aggressive in the market place. Entrepreneurs are also more likely to engage in environmental scanning for location of opportunities, develop strategies for the exploitation of opportunities and adapt to change, operate with flat management structures and make use of informal networks than large company managers (Griest, 2010). Many of them also have creative minds and are able to develop truly innovative and need fulfilling products and services (Griest, 2010). It is apparent from the preceding discussion that the marketing challenges and environments of small firms are significantly different from those of large firms. Whilst the market competitiveness of small firms is seriously affected by the lack of different types of organisational resources, skills and strengths, they have the advantages of low operational costs, swift decision making abilities and the inclinations and tendencies to move with agility in the market place in response to customer needs. Suggestions for Marketing Strategies for Small Firms Owner entrepreneurs, as well as managements of small companies must essentially understand the importance of marketing for the performance, growth and competitive advantage of their organisations. Small business owners, as stated earlier, are often challenged by various responsibilities and the need to oversee different operational functions like production, finance and accounts (Wolff Pett, 2006). They also have to regularly cope with the compliance needs of various legal and regulatory authorities. These pressures thus lead to a dissipation of effort, dilution of focus from important activities and confusion over prioritisation of managerial tasks (Wolff Pett, 2006). Emergent issues in areas of production, HR and environmental management often consume substantial chunks of available managerial time (Wolff Pett, 2006). It is, in these circumstances, essentially imperative for managements to realise that marketing constitutes one of the most important of organisational areas, especially so in smaller organisations that have to constantly face competition from various small and large organisations in their business sectors and are otherwise constrained by a range of internal and external issues (Voss, et al, 2002). The managements of small firms must realise that effective marketing is important for increase of consumer demand, better consumer relationship management, improved organisational image, development of organisational and product brands, enhancement of sales and growth of profits (Voss, et al, 2002). Lack of attention to the marketing function can prove to be devastated to such organisations and result in reduction of consumer base, lack of consumer awareness, reduction in sales, profits and cash flows, lessening of competitive advantage and finally even to organisational decline and demise (Voss, et al, 2002). It is thus critical for small company owners to understand the importance of marketing for organisational health and wellbeing and prioritise their activities accordingly (Voss, et al, 2002). It is thereafter important to focus on marketing and develop appropriate marketing plans that address the immediate and midterm strategic and marketing objectives of individual organisations (Welsch, 2003). Marketing plans are complex exercises that entail critical evaluation of external environmental conditions, competitive evaluation and analysis, market analysis and customer segmentation with the use of various tools like Porters Five Forces analysis, examination of organisational strengths and weaknesses and finally the development of appropriate marketing mix and marketing budgets (Welsch, 2003). Owners of many small organisations feel such exercises to be too detailed, elaborate and essentially suited for large organisations (Welsch, 2003). Such attitudes are however fundamentally erroneous and lead to the development of organisational and marketing strategies and action plans that are often impulsive and heuristic in nature and taken without information and analysis of importa nt environmental and organisational factors that could strongly impact the working of such organisations (Welsch, 2003). It is important for small organisations to engage in marketing analysis and develop marketing plans, even if they are conducted with lesser detail and greater simplicity than in large organisations (Pelham Clayson, 1998). Such an analysis will help managements to understand the different environmental variables that can affect their business, the strengths and weaknesses of their competitors, their own strengths and weaknesses and available opportunities and potential threats (Pelham Clayson, 1998). Such analysis will enable them to ensure that their marketing strategies do not run counter to environmental forces and that they can use their strengths to exploit market opportunities (Pelham Clayson, 1998). The development of an appropriate marketing mix is one of the most important objectives and outcomes of a properly executed marketing plan (Longenecker, et al, 2005). The marketing mix essentially details organisational strategies in areas of product placement, pricing, distribution and promotion (Longenecker, et al, 2005). The development of a marketing plan will help small business owners to focus on these individual elements and take appropriate decisions after consideration of the actions of their competitors, environmental conditions, consumer needs and available resources (Longenecker, et al, 2005). Many small organisations again feel the development of a marketing plan to be superfluous and irrelevant and engage in decisions that are primarily based upon hunches, perceptions and attitudes (Maritz, 2008). Such attitudes are, as stated before fundamentally erroneous and can lead to the overlooking of important issues and lead to adverse operational, marketing and organisational outcomes (Maritz, 2008). Greater stress on pricing and lesser emphasis on distribution and advertising is a common mistake of most small business owners who work on the assumption that the offering of cheap prices is the most important marketing strategy (Maritz, 2008). Such an attitude could however lead to lack of awareness about the product or service and its unavailability to customers who are willing to try them out (Maritz, 2008). The development of a marketing plan also may compels small business owners, not only to realise and understand a range of marketing issues but also builds an appreciation of the differences between small and large organisations in different operational and marketing areas. Small entrepreneurs and business owners must realise the completely different marketing challenges that face large and small organisations and adopt appropriate marketing mixes that are customised for their individual circumstances and organisations (Pelham Clayson, 1998). Small business owners must focus individually on each separate element of the product mix. The first element of the marketing mix concerns product positioning and placement (Pelham Clayson, 1998). Michael Porter in his theory of generic strategies states that business firms essentially need to decide between following a strategy of low cost or of product differentiation (Porter, 1998). Whilst Porters theory of generic strategies has been critiqued extensively with experts showing that it is possible for organisations in certain situations to differentiate their products as well as offer attractive prices, its tenets by and large hold good for small companies (Porter, 1998). Owners of small companies often feel th at they can achieve competitive advantage because of their lower overheads. Such a concept is however fundamentally fallacious because it is difficult for such companies to truly achieve the scale economies that are possessed by larger organisations (Odaka Sawai, 1999). Increased focus on reduction of costs thus leads to corner cutting and ultimately to lower product quality. It is thus eminently advisable for small business owners to position their products differently from those of their competitors through the adoption of appropriate product differentiation strategies that could stem out of unique product features or specific quality attributes (Odaka Sawai, 1999). Marketing experts feel that small businesses are ideally placed for the development of small marketing niches that allow them to focus on one specific segment (Van Der Hope, 2008). Niche marketing is primarily an extension of the differentiation strategy advanced by Michael Porter. It is ideal for small companies because it allows them to concentrate their organisational, operational and marketing resources on one specific market segment and develop a product that is different from others and services the needs of a specific segment (Van Der Hope, 2008). Whilst niche marketing is particularly suitable for small companies, it does have the risks of small market size (Van Der Hope, 2008). Demand in such circumstances is sustained by loyal customers rather than growing target segments, it is also not very conducive to achievement of scale economies (Van Der Hope, 2008). Small businesses, apart from focusing on the positioning of their products and services must also formulate strategies for distribution and promotion (Hills, et al, 2008). Both distribution and promotion are expensive operations and concern numerous external agencies like distributors, retailers and advertising agencies (Hills, et al, 2008). Small businesses must carefully look at the implications and costs of various distribution and promotional strategies to ensure optimisation of organisational spends and efforts (Hills, et al, 2008). Many small organisations refuse to face these problems squarely and end up operating within very small local areas and without any effective promotional activities (Hills, et al, 2008). Whilst such constraints were undoubtedly true to some extent in the past, the advent of the internet and its progressive proliferation across the world has changed the distribution and promotion opportunities of small firms beyond recognition (Mohan-Neill, 2006). Online marketing provides various opportunities to small organisations to distribute and promote their products (Mohan-Neill, 2006). Numerous small organisations across the world provide a range of services in different areas of life that are delivered online across the internet to different areas of the world (Mohan-Neill, 2006). Many organisations that do not have products that can be distributed online use the internet to take orders and payments and thereafter deliver products and services through physical means like mail and courier (Mohan-Neill, 2006). The internet has also opened up numerous promotional avenues, not only through optimisation of website traffic through use of search engines but also through the use of numerous social networking alternative like facebook, my space, twitter and YouTube (Maritz, 2008). Owners of small businesses should carefully formulate, develop and implement distribution and promotion plans in order to take maximum advantage of the various physical and online options that are available in the contemporary age (Maritz, 2008). Marketing plans should be integrated, make use of different marketing communication options like advertising, physical promotions and PR and most importantly make substantial use of online facilities (Maritz, 2008). Conclusions This essay deals with the marketing challenges of small businesses, the ways in which these challenges are different from those faced by large organisations and the ways in which small businesses can optimise their marketing strategies and efforts. Small businesses are challenged by a number of marketing and environmental factors and are constrained by the various limitations of size and resources. Such factors are significantly different from those influencing the options and alternatives of larger organisations and need to be comprehensively examined and analysed for formulation and development of appropriate strategies for achievement of business success, organisational growth and competitive advantage. Whilst small businesses do face numerous constrains and difficulties in marketing their goods and services, numerous opportunities have developed in recent years in areas of niche marketing and in distribution and promotion of their products with the use of online channels. It is important for owners of small businesses to carefully assess their environmental and organisational circumstances, identify businesses opportunities and make the best possible use of modern facilities for marketing their products, reaching customers and building strong customer relationships. Recent years have witnessed the phenomenal growth of small business start ups in the online domain. Whilst small business owners do face numerous difficulties and challenges thoughtful analysis of marketing conditions, prioritisation of work and effective use of available facilities can certainly help them in growing their business and achieving organisational success.

Assignment 4: Internet Technology, Marketing, and Security Essay

Assignment 4: Internet Technology, Marketing, and Security The purpose of this assignment is to â€Å"evaluate the reasons Social Media Marketing has become exceedingly popular among businesses of all sizes. Analyze the advantages and disadvantages of Social Media Marketing for business entrepreneurs. Assess how Social Media Marketing is helping Pepsi gain more customer insight than it would have otherwise. Research two (2) other businesses that have used Social Media Marketing to their advantage. Discuss how each of these businesses has utilized Social Media Marketing and provide examples with your discussion. Speculate what impact Social Media will have business over the next decade and identify what skills you need to improve to take advantage of the changes (Boone, Kurtz, 2012).† Evaluate the reasons Social Media Marketing has become exceedingly popular among businesses of all sizes. â€Å"The experimentation era in social media marketing is long over. Social media has proven to be a viable and potentially lucrative marketing channel for B2B and B2C companies of all sizes, across the globe. As more and more companies jump on the social media bandwagon, it is more important now than ever that you provide value, not add to the clutter already on the social web. The reigning champions of social media are the brands that listen to their community, and deliver worthwhile information based on what they hear (Top Rank, 2013).† Analyze the advantages and disadvantages of Social Media Marketing for business entrepreneurs. â€Å"Your online advertising strategy might include paid advertising on search networks such as Google, Bing, or Yahoo. Social ads on Facebook, Twitter, or LinkedIn may also be effective tools for your messaging. Our first step is to determine your goals and where your audience lives, in order to place your brand in front of the right people, in the right place, at the right time (Top Rank, 2013).† â€Å"Through compelling, creative copy and imagery, our search, display and social ads inspire your audience to take your desired action, whether your intent is to: †¢ Attract new prospects and customers †¢ Engage consumers and build community around your brand †¢ Convert prospects to loyal customers (Top Rank, 2013).†. â€Å"Regular reporting and ongoing optimization ensures you receive maximum accountability and the best results possible from your online campaigns (Top Rank, 2013).† Assess how Social Media Marketing is helping Pepsi gain more customer insight than it would have otherwise. â€Å"The rise of social and mobile is rewriting the marketing playbook for even the most established companies. While many brands are still casting a wary eye at social media for business, Pepsi has embraced the technology, carving out an ambitious social strategy aimed at building relationships with the Millennial generation, soon to be the largest consumer group in US history (Social, 2012).† â€Å"A recent article by David Hatch of US News and World Report does a great job of breaking down Pepsi’s social strategy, the centerpiece of which is its â€Å"Live For Now† marketing campaign. The campaign, targeting 18-35 year olds, is a great example of an established brand effectively utilizing five critical aspects of social media marketing: consumer engagement, user-generated content, data aggregation, geo-local, and inbound marketing (Social, 2012).† DYNAMIC CONSUMER ENGAGEMENT â€Å"Pepsi’s new digital dashboard is the most recent iteration of an online strategy that included last year’s debut of Pepsi Pulse and Sound Off, online destinations that encouraged visitors to comment on The X-Factor, a Fox network reality television show whose sponsors include Pepsi (Social, 2012).† â€Å"To further engage its online community, the song selection and encores for a Pepsi concert series this summer featuring major artists will be chosen in part by tweets from the live audience and people watching online (Social, 2012).† â€Å"Pepsi is learning that if you want to remain relevant with this new type of consumer, you have to be where they are, you have to talk their language,† and you have to connect with them in a way that â€Å"keeps them feeling like they want to be part of your brand,† says Brian Solis, a principal analyst at the Altimeter Group. Connected consumers, he adds, are â€Å"getting groomed and conditioned to expect the world to come to them (Social, 2012).† â€Å"USER-GENERATED CONTENT ‘Social media marketing is becoming increasingly dependent on user-generated content, meaning reviews, comment, or any other input from customers. Peer influence has a measurable impact on consumer purchase decision, especially among Millennials (Social, 2012).† â€Å"Understanding this, Pepsi has created a new digital dashboard on their Pepsi.com place page to support the Live For Now campaign, highlighted by user-generated messages from Facebook and Twitter that include the #LiveForNow hashtag (Social, 2012).† â€Å"Moreover, with the help of SocialFlow, a tool that ranks the popularity of editorial content within audience segments, Pepsi is paying attention to what their target audience is interested in. â€Å"It’s all about that movement [online], and where people’s time is being spent,† says George Smith, senior manager, social strategy and execution, for Pepsi Beverages (Social, 2012).† â€Å"Actually listening to consumers in order to understand their wants and needs builds user loyalty, creating brand evangelists who will spread the word and act as online defenders of the company brand (Social, 2012).† â€Å"Moreover, by monitoring what people say online about its products, Pepsi is able to manage user complaints in real time, before they take on a life of their own (Social, 2012).† â€Å"DATA AGGREGATION â€Å"Unlike traditional, harder-to-track advertising methods such as TV and print, social media provides a wealth of statistics about the age, gender, demographics, interests, and reactions of consumers. As Smith notes, â€Å"With digital, you end up with a lot of extra data, and you end up with a lot more understanding of who your consumer is (Social, 2012).† â€Å"This consumer data helps Pepsi refine its consumer engagement model, the effect of which is to attract new fans, and thus more data (Social, 2012).† â€Å"GEO-LOCAL REACH â€Å"Pepsi is hopping on the newest trend in social: SoLoMo, or Social, Local, Mobile. Thanks to the massive consumer adaptation of smart phones, companies like Pepsi can integrate social media with location-based mobile marketing. (Social, 2012).† â€Å"Why do so? Because Pepsi can be more surgical about reaching populations in specific geographic areas. â€Å"We’re seeing good results from that,† Smith says, explaining that the company can target local audiences with specially tailored advertising messages fueled by location information provided in Facebook profiles (Social, 2012).† â€Å"This kind of micro-targeting allows brands to hunt consumers with a high-precision rifle instead of a shotgun (Social, 2012).† â€Å"INBOUND MARKETING Out with the push, in with the pull (Social, 2012).† â€Å"Pepsi has recognized that the tech-enabled power shift to the consumer has effectively neutralized many traditional forms of outbound, or push, marketing. Today’s savvy consumer wants to be listened to and courted by  marketers. They want direct channels of communication to brands. In short, consumers expect brands to employ inbound marketing best practices as an engagement model (Social, 2012).† â€Å"When done properly, this approach is a win-win for brands and consumers. Pepsi’s social strategist George Smith recognizes the mutual benefit of direct consumer interaction: â€Å"It’s nice to be able to have that direct conversation with them, and not have to rely on a specific media channel to push this, or buy TV constantly to push that message,† he says (Social, 2012).† â€Å"By last count, Pepsi’s 8,181,075 Facebook fans agree (Social, 2012).† Research two (2) other businesses that have used Social Media Marketing to their advantage. â€Å"At TopRank ® Online Marketing, we understand that your company’s success in social media requires a deep understanding of your customers’ needs and their journey throughout all stages of the buying cycle. We specialize in crafting targeted, high quality content that serves to attract, engage and even convert customers as they factor their social relationships into their purchasing decisions. Many companies offer social media marketing, yet we are one of the few with experience and proven results to consistently reach goals in branding, social PR, and even lead generation using social (Top Rank, 2013)† â€Å"†¦Ã¢â‚¬â„¢ BFM ® is a unique industrial pipe connector designed to provide safe, sanitary and efficient connections for the transportation and movement of powder within bulk powder processing plants (Top Rank, 2013).† Their objective was â€Å"†¦Ã¢â‚¬â„¢ develop a new website and launch a strategic online marketing program that would increase visitors as well as sales inquiries for the company†¦Ã¢â‚¬â„¢ (Top Rank, 2013).† â€Å"The decision was made advertise their brand on the website utilizing search engine optimization (SEO) tactics: †¢ Website development and technical assessment †¢ Keyword research and content optimization †¢ Content promotion and link building †¢ Web analytics and conversion tracking (Top Rank, 2013).† These actions utilizing social media marketing resulted in, â€Å"†¦ website traffic increase more than 700% in its niche market. Additionally, with the launch of its creative campaign, The Powder Doctor, organic traffic to the company website has more than doubled. (Top Rank, 2013).† â€Å"Organic search, combined with the creative concept leveraged for online PR and email marketing campaigns, have helped to increase bottom line sales for the company by 83% (Top Rank, 2013).† Discuss how each of these businesses has utilized Social Media Marketing and provide examples with your discussion. â€Å"A success social media strategy ties outcomes to overarching business goals and connects you with the right prospects and customers on the proper platforms. It engages your loyal fans, friends, and followers through a combination of organic and paid media (Top Rank, 2013).† â€Å"Our social media marketing experience at TopRank spans all of the major social networks and a variety of niche sites, including Google+, Facebook, Twitter, LinkedIn, Pinterest, Instagram, SlideShare, YouTube and more (Top Rank, 2013).† Speculate what impact Social Media will have business over the next decade and identify what skills you need to improve to take advantage of the changes. In closing, the purpose of this assignment is to â€Å"evaluate the reasons Social Media Marketing has become exceedingly popular among businesses of all sizes. Analyze the advantages and disadvantages of Social Media Marketing for business entrepreneurs. Assess how Social Media Marketing is helping Pepsi gain more customer insight than it would have otherwise. Research two (2) other businesses that have used Social Media Marketing to their advantage. Discuss how each of these businesses has utilized Social Media Marketing and provide examples with your discussion. Speculate what impact Social Media will have business over the next decade and identify what skills you need to improve to take advantage of the changes (Boone, Kurtz, 2012).† References Boone, L. E. & Kurtz, D. L. (2012 Update). Contemporary business (14th ed. Hoboken, NJ: John & Sons. Social Media Today (2012). 5 Ways Pepsi’s Use of Social Media is Right On. Retrieved from http://socialmediatoday.com/synecoretech/509355/5-ways-pepsis-use-social-media-right Top Rank (2013) Online Marketing. Retrieved from http://www.toprankmarketing.com /services/social-media-marketing// [pic][pic]

The Forbidden Facts About Online Essay Uncovered by an Old Pro

The Forbidden Facts About Online Essay Uncovered by an Old Pro Now whenever you have everything clean, take a close look at your wooden book rack and slowly begin arranging books in accordance with their genre, thickness or author name. During the significant moments, you can't manage writing even an excellent enough' essay. You should have noticed that each topic is significantly related to the some type of mystery since if you won't create suspense and unveil the unknown then you won't be in a position to pull in the readers attention at any situation. Its as in the event that you have divided half part and together you generate a great reading material for those readers. By now you should have thought a lot many topics to aid you with your essay writing, but if you get the true form, everything appears to receive wiped away from your mind and everything you are able to do is to stare blankly at it. Essays are largely written in persuasive fashion and the write needs to persuade the reader usually. They can also seem fun if you get the correct approach to it and put your own creativity into it. Remember an accurate beginning and ending are a necessity for an effective essay. Taking assistance from tutors and friends is a great way to come up with your abilities. Students have to know the reason for taking assistance. A successful on-line teacher must also use teaching practices that are appropriate to the medium. Your tutor will surely understand. So, it's always far better to be aware of the internet tutors having advanced knowledge of the subject. There are a lot of good on-line schools, but additionally, there are unethical schools together with outright scams. Learn more about plagiarism If you do not know about the idea of plagiarism totally, then you need to first make an effort at knowing it. It is crucial to understand plagiarism since it is a significant issue in academics. There are 3 important steps that you need to follow when you're writing an on-line essay. If you would like to compose an essay, then there are particular things you must want to understand. The essay writing companies take the strain out of essay writing and offer a new service in the worldwide essay writing business. Inexpensive essay writing services make certain that the best of the expert essays are provided to the students. Essay writing isn't a typical job, but unfortunately students take it as. When you truly feel too demotivated to think of new suggestions for your essay, you can ask for Essay Help Singapore should you stay there, helps for different countries are also offered. Students may mention the most important information at the conclusion of such essays. At times they are expected to finish some essays every week. The History of Online Essay Refuted The only thing that all the very best marketers online agree on is that you should have a list. Reasons why online shopping is now popular are quite simple to comprehend. It is the most convenient way for shopping. About the prices, it always have the best prices and the best deals since the sellers do not have to open a shop. The War Against Online Essay It is critical to compose the essay in a manner it stands out from the rest of the applications. Do effective planning Since you will use various information sources while writing your research paper, it's better to plan it well ahead of time. In the event you could not locate someone nearby, consider using proofreading services of on-line essay help providers. Searching with relevant keywords is extremely important. A Secret Weapon for Online Essay When it has to do with essay writing, it's a fantastic medium to provide your personalized view about a topic. For cases otherwise, here's a tiny guideline on how best to go ahead with a topic. You should not make up anything by yourself if it's an informative topic. If you select a difficult essay topic for a specific reason, or when you have zero choice and thegiven topic doesn't interest you much, do take the support of Professional Advisers. To select a web-based reading classes in music you should learn the appropriate provider. Once more, there's nothing to fear since there are websites devoted to helping out students faced with these kinds of difficulties. If they manage to follow the above mentione d suggestion, they are likely to land on genuine and authentic writing service provider. On the other hand, they should never include too many smartphone brand categories. Online Essay Fundamentals Explained Writing an official letter might be a tough endeavor for a beginner but once you receive the suitable format, it's going to be easy later on. It is easy once you learn the proper format. Students will need to go acquainted with the referencing style as a way to apply it in writing. They should always remember to lay out quotes in a correct manner.