Pricing

When managers are deciding how to price their products, they have to focus on many important cost and market factors in addition to legal issues that they may encounter. Prices are usually determined by supply and demand that clears the market unchanged by price controls (Cox, 1997). Price controls are set in place by legislation on many products to keep the price from going to high. Management would have to comply to any price controls that are set in place for the specific product that they are offering the market. Competition in the market forms the prices that people are willing to pay for a good or service (Ballve', 1956). If the management knows from their prior research that their product is in abundant supply, they should look to competitors pricing and try to match the ranges that they are pricing, making adjustments based on the quality of the product in comparison. If research suggests the product is scarce and in high demand by the public, pricing should be adjusted higher because of the willingness of the consumer to pay the inflated price. This is why is it thought that the free market is the sovereignty of the consumer (Ballve', 1956).

Price discrimination that offers product at different prices based on the consumer type can also be illegal so management needs to be sure they are pricing in accordance to all of the laws in the area where they are making sales.  Management needs to ensure that they are covering all of the expenses that were incurred during the production of the product including materials, labor, and overhead. Selling products at a loss or at the break-even point will have no benefit to the company.

            Discounted cash flow is a valuation method that analyzes how attractive an investment opportunity is (Investopedia, n.d.). It uses projected future free cash flow and discounts them from the weighted average cost of capital to determine the present value of the investment. If that value is higher than the current cost, it is determined that the investment is undervalued and has the potential to be a good investment. I would disagree with the R&D manager because it is not impossible to use the DCF Method in research and development. You don’t need to measure cost saving; instead, they would forecast future earnings based upon if the research and development project were successful and factor that into the equation (Hindinger, n.d.).

References

Ballve', F. (1956). Essentials of Economics: A Brief Survey of Principles and Policies. Mexico City. Retrieved from http://freedomkeys.com/pricecontrols8.htm

Cox, J. (1997). The Concise Guide to Economics (Second Edition ed.). Savannah-Pikeville Press. Retrieved from http://freedomkeys.com/pricecontrols3.htm

Hindinger, J. (n.d.). eHow Money. Retrieved from How to Use Discounted Cash Flow (DFC) in Research and Development: http://www.ehow.com/how_6576330_use-flow-_dcf_-research-development.html

Investopedia. (n.d.). Investopedia. Retrieved from Discounted Cash Flow-DFC: http://www.investopedia.com/terms/d/dcf.asp#axzz1nmvqV5Cn

E-books or Paperback?

            My research suggested that the younger that the consumer was, the more likely they were to make their purchases online. Those who did a lot of their shopping online said that it saved them time and gas money that they would have used sitting it traffic and shopping, had they physically gone to the store. Those online shoppers also boasted that they could find better deals online and very rarely had to pay fees on shipping. Another interesting twist was people who bought books that they read on a device that they already owned, which completely eliminated the need for any shipping at all. The young group mostly looked for deals on textbooks that they could only find online. The people in the middle age group purchased mostly books, more specifically, reference or leisure. This probably has to do with the fact that most of them have completed their degrees. The few people who did purchase books online from the older group were the more tech savvy of their generation. This group made the fewest online sales from those who I questioned on the topic.

The people who bought books that they read on their devices seldom noted a reason to ever enter a brick and mortar establishment. The books summary and description are available on the site that they purchase it from. Most have 20-30 pages as a preview to the reader before they commit to the purchase. This is very similar to thumbing through the pages of a book that you would pick up in a brick and mortar establishment. These online store have libraries that you can browse through if you don’t know what you want as well as convenient searches that lead the reader to almost anything they could ever dream of reading. It some situations, it was ever noted that actually having to go to find a book in a store would take more time and effort than the online store.

            The younger 50% of the demographic that I spoke to don’t buy paper copies of books at all. They take up space and in some instances, cost notably more than the electronic version. The older people got, the more attached they seemed to the sentimental idea of their books. They wanted to be able to dog ear the pages and keep their copy to read again in the future with their already extensive collection of books that they had acquired over their lifetime. Amazon, who is one of the largest sellers of the e books, says that they outsell the printed version two to one (Association of American Publishers, 2011).

References

Association of American Publishers. (2011, April 15). Engadget. Retrieved from E-book sales triple year-over-year, paper books decline in every category: http://www.engadget.com/2011/04/15/e-book-sales-triple-year-over-year-paper-books-decline-in-every/

Job Order Costing Method Versus The Process Costing Method

The job order costing method is used for measuring and individual job or batch order whereas the process costing method is used for measuring different aspects of the process itself. The process costing method also measures the standardized units that are being produced. Process operations are repetitive, highly standardized, and usually used in situations that involve high production volume. The products processes have little flexibility and result in a homogeneous product or service. Job order operations are custom orders that result in heterogeneous products or services. Unlike the operations for processes, job order operations have a low production volume, a high level of flexibility during the production process, and low to medium standardization of the actual product.

All of this means that the costing methods for both have to be tailored to the type of production that is being implemented. They have both similar and contrasting aspects to the inner workings of their systems. Job order costing specifically assigns jobs direct materials, labor, and overhead. When the cost of the total job is divided by the number of units that the job produced, the result is the total cost per unit.

The process costing method assigns these same direct materials, labor, and overhead to a specific process as opposed to a job. The processes total cost is found and then divided by the amount of units that must pass through the process during production. The result is the cost per equivalent unit. Both methods are “ultimately interested in determining the cost per unit of product (or service) resulting from either system” (Wild & Shaw, 2012, 1).

The company that I work for would best benefit from the process costing method. We do fuel acquisitions which is a service we provide for our customer, the warfighter. We have several different methods that we use for each procurement. The easiest way to place costing metrics on each acquisition would be to measure the amount of money that is spent on each individual process required. An emergency buy (ebuy), which normally takes a few days, does have the same processes applied to it as a bulk fuel acquisition which takes month to complete. Using this method would leave room for variety in the services that we offer.

References

Wild, J. J., & Shaw, K. W. (2012). Managerial Accounting. New York: McGraw Hill/Irwin.

New Consumer Products, Target Markets, & Competitive Advantages

The new consumer product is called The Body Ball. It is a small inflatable ball that has two resistance bands made of rubber attached to each side. My target market is anyone who is in the fitness industry, interested in fitness, or is simply looking to get into shape and lose weight.  The ball will be a condensed version of several different types of fitness equipment and can be easily used from the privacy of home for any shy consumers out there. The ball could be sold in volume to any gyms who want to use it for classes or make it available for gym goers to use in their free time. Gyms always want to have the most modern equipment and this would be an opportunity to stay ahead in their industry.

A good song for the campaign would be anything that was very upbeat or had to do with fitness or working out. Some suggestions would be “Move It” by the artist Dope. A good endorser would be someone very fit and athletic, even someone who had a career in the fitness industry such as Bob Harper from The Biggest Loser. “According to the U. S. Food and Drug Administration (FDA) Americans spent an estimated $30 billion a year in 1992 on all types of diet programs and product” (Worldometers, 2012, 4) and that means there is a huge market out there for us to get a slice of. It is easier to make money off of a product when you have a larger segment of people that are going to have a potential interest in your project.

This is a very unique product that many have never seen anything like. By showing the results that the product can produce, people are going to want to get their hands on this piece of fitness equipment. We can advertise in gyms and on television so that we can target as much of our specific market segment as possible. We are poised to compete with the competition because, as many people have never seen or used this product before, they aren’t going to have any idea what type of results that it can produce. They will have to try it on their own to figure out how well that it works. New products spark peoples interest and a lot of people are so desperate to lose weight that they are willing to try anything. This will be a very high quality product and good marketing could make this product a lot of money. If we could get commercial time when shows that are specifically targeting weight loss, such as The Biggest Loser, we will be able to reach more of our target market as well.

References

Worldometer. (2012). Real time world statistics. Retrieved from http://www.worldometers.info/weight-loss/

Successful and Unsuccessful Marketing Plans

Introduction

A marketing plan can make or break the overall success of a product or service. The way that fire services has both failed as well as succeeded with their different marketing techniques is a good example and the things that should and should not be done when trying to carry out a successful marketing plan. The movie Warrior’s failure to attract an audience used the excuse that America wasn’t ready for MMA. Taking a look back, it seems that it may have been the marketing teams fault more than Americas. Each of these examples are great to look back and learn from for any marketing plans that are created in the future.

Marketing Plans

A marketing plan is a company’s action program that details the strategy that they are using or planning to use. The strategy can be for one specific product or an entire line of products, depending on how individualized the plan is. The plan should be a “fully detailed analysis of the market you are participating in, strategies you’ll employ and the tactics for executing these strategies” (MarketingPlan.net, 2011). The marketing plan can make or break the level of success that a product or service achieves. A lot of time, effort, and energy should be placed into a marketing plan because of the impact it has.

Fire Services

The marketing plan for Fire Services was successful for many different reasons. They looked at their services as a whole and tried to utilize every aspect of the service in their marketing plan. Respected speaker on fire services marketing Ben May stated “how we perform our job, our uniforms, our apparatus, our public appearance, and non emergency public exposure all market us to the community” (Hyden, 2011). His ability to see fire service as a concept reinvents the way that they go about doing their marketing.

Fire services start with their strategic plan and develop their marketing plan from that. This enables the fire service provider to keep the original vision in mind. They utilize the strategic plan as a navigation tool for the marketing that they do. This is a good example of how including all of the aspects of the product or service that you are creating a marketing plan for can lead to the overall success of the product or service itself.

In the same article, reasons that marketing attempts have failed in the past is highlighted. The major reason for marketing failure has been company’s inability to separate marketing from selling. They detail how the modern day marketing techniques that are used are a relatively new concept. Where, in the past things have been sold because we need them to meet our everyday needs, the newer marketing is geared towards meeting needs and wants and reaching out for people disposable incomes as well.

 This is a good example of the fact that knowing the strategic plan and using it to implement your marketing plan is key. If the right elements of a product or service fail to be built on, it has the potential to compromise any marketing efforts that have been put together by the company. From the examples, it is obvious that what is chosen to be in the marketing plan is essential.  An extensive and well thought out marketing plan is imperative to the success of any product or service.

Warrior

A recent movie that was dubbed a failure by critics alike was called Warrior. Part of the reason that led the movie to be a failure was MMA’s lack of mainstream appeal. The movie was about MMA fighting. It was concluded that the public just wasn’t into the idea of MMA fighting enough to take an interest in going to see a movie about it.

 Instead of being a breakout movie to introduce MMA to a broader audience, it ending up flat out failing miserably. This could have been the marketing teams fault because they failed to spike the public’s curiosity about the emerging sport. It could also be that people just aren’t interested in cage fighting. Nevertheless, the movies marketing team was unsuccessful in securing the markets interest and the movie’s box office debut turned out to be a disaster.

The more saddening truth about the movie is that its marketing team had a budget of $45 million dollars (Snowden, 2011). Contrary to the title of the article “Does Warrior’s Box Office Failure Show The Mainstreams Still Not Ready for MMA And The UFC” (Snowden, 2011), there is a lot of contradictory evidence that we have seen. Shows about The UFC, such as The Ultimate Fighter, have gained large audiences in the past. If so many people can be interested in a television show, the marketing team for the movie should have been able to produce a better turn out for the movies box office debut.

A large audience also shells out a hefty amount buying UFC fights on paper view. The marketing team for this project did not do a good job of taking advantage of the elements of marketing that these shows and events do. I don’t think that it was the audience not being ready for MMA; I think that is a prime example of when marketing plans fail.  

Conclusion

From a failure at the box office for an MMA movie, to the successes and failures of fire services marketing campaign, there is a lot that can be learned. Not making the same mistakes as other have in the past is one of the best ways to ensure success in marketing. An extensive and well thought out marketing plan can help a product or services success immensely. These examples help to show the gravity of poor decisions as well as plans that paid off.

References

Hyden, T. (2011, April). Retrieved from At the Crossroads: Fire Service Marketing and Strategic Planning: http://ehis.ebscohost.com.proxy.cecybrary.com/eds/pdfviewer/pdfviewer?vid=2&hid=101&sid=e367d57d-e0e2-45e7-ade6-b6c977d8e89d%40sessionmgr112

MarketingPlan.net. (2011). Marketingplan.net. Retrieved from What is a Marketing Plan?: http://www.marketingplan.net/what-is-a-marketing-plan/

Snowden, J. (2011, September 19). Retrieved from Does Warrior's Box Office Failure Show The Mainstreams Still Not Ready For MMA And The UFC?: http://mma.sbnation.com/2011/9/19/2434990/UFC-News-movie-mainstream-warriors-box-office-failure-show-the-mainstream-fox

Management Accounting

The different types of accounting information are financial, managerial and tax accounting. Managerial is the most important information because it is prepared for internal use. Financial accounting is prepared mainly for stakeholders and creditors. Managerial accounting can help with establishing the goals of a company. It can also be useful as a performance metric and decision making tool.

Internal accounting information is an extremely useful tool when management is trying to make decisions. Decision-making performance can also be evaluated using internal accounting information. There are not set rules on how internal accounting is done like there are with financial accounting. It can be presented in any manner that is helpful to the people receiving it internally without consequence.  Internal accounting information is usually focused on the goals that they are looking to achieve and is future oriented. It is important that the information that internal accounting is based upon is timely.

A “management accounting information system can help businesses run better by providing timely information on internal operations” (Shanker, 2012, p.1) Technology is used to develop and communicate information by means of email, video conferencing, teleconferences, fax machines and videotapes. All of the venues are useful when implemeting information technology. Many people in a large company can be reached with minimal effort which is ideal for busy managers.

References

Shanker, S. (2012). Chron. Retrieved from How to Establish a Management Accounting Information System: http://smallbusiness.chron.com/establish-management-accounting-information-system-3953.html

Impacts of Technological Advances: Case Study Questions

Case Study Questions

Abstract:

            Technological advances have impacted various areas of everyday life. Augmented reality has created more opportunities for marketing. The flash crash was caused by computers programmed to do high frequency trading. Innovative information systems track performance metrics for Valero Energy. Though these three topic areas seem very different, they all have cutting edge technology in common.

Case Study Questions

The case studies are centered around different types of relatively new technology and the impact that it has made. Augmented reality completely changes the way that products are marketed. High frequency trading has caused, and could potentially cause again, flash crashes that many cannot comprehend. Performance metrics can be tracked on innovative dashboards keeping executives in the know when things veer off the goal path. All of this new technology is changing the way we live our lives and do our business.

Reality Gets Better

1.     The difference between virtual reality and augmented reality is that “virtual reality is a computer-generated, interactive, three-dimensional environment in which people become immersed” (Laudon & Laudon, 2012) whereas augmented reality enables the user to “maintain a presence in the real world” (Laudon & Laudon, 2012).

2.     Augmented reality is more appealing to marketers than virtual reality because it gives them a wider range of possibilities in relation to the types of ads they develop.

3.     Augmented reality is useful for real estate shopping applications because if you are walking around a neighborhood that you are interested in buying property in, applications have been developed that show you where property is available, right in front of your eyes. With augmented reality “a 3-D rendering of a condo tower appears to climb out of a magazine page when viewed with a smartphone's camera and screen (and) other real estate print ads are brought to life with clickable buttons and multimedia” (Roberts Jr., 2012)

4.     Other working applications of augmented reality that I would suggest would be useful could be someone modeling clothes when you place your phone in front of folded ones in a store.

The Flash Crash: Machines Gone Wild?

1.     The conditions preceding the flash crash involved fearful and uncertain investors and market that was “already down and trending even lower” (Laudon & Laudon, 2012).

2.     The benefits of electronic trading are “speed, reduced cost, and more liquid markets” (Laudon & Laudon, 2012) and the use of algorithms that learn what will work in the market and “adjust their stock trading strategies” (Laudon & Laudon, 2012) based on what the market is doing.

3.     The features of electronic trading and automated trading programs that contributed to the crash were the “computer selling algorithm that dumbed 75,000 contracts” (Laudon & Laudon, 2012) within twenty minutes triggering other HFTs that used algorithms to begin selling as well.

4.     The only way that the flash crash could have been prevented would be if computer were never allowed to have control over buying and selling. When you give computers this type of control, no matter what the limitations are, there is always the potential for something to go very wrong. Unless humans are given back the power. The SEC’s Chairman Mary Shapiro was quotes saying “Can I guarantee we will never have another flash crash? No” (Thomas/Reuters, 2011).

Piloting Valero With Real-Time Management

1.     The issues that needed to be addressed when developing Valero’s dashboard was ensuring that they were measuring the right thing, it limited how innovative they were, and an array of others “from backward-looking metrics and ill-advised goals to antiquated budgeting approaches and technophobic executives” (Henschen, 2009).

2.     The COO of Valero “wanted to see real-time data related to plant and equipment reliability, inventory management, safety, and energy consumption” (Henschen, 2009) performance metrics displayed by the dashboard. The benefit of the information is that executives can receive timely information so they can take immediate corrective actions when plants stray away from the goals.

3.     The information systems required for Valero’s dashboard are “SAP’s Manufacturing Integration and Intelligence application” (Henschen, 2009) and “SAP BusinessObjects Xcelsius software” (Henschen, 2009).

4.     Valero’s dashboard is so effective at helping to pilot the company that it has “executive-level, refinery-level, and even individual system-operator-level dashboard views” (Henschen, 2009). It has been so successful that thousands of company are attempting to create systems similar to Valero’s.

5.     Valero’s dashboard should not focus on things that it cannot control. If it is out of their hands, there is no sense in people worrying about it. They should focus on the factors that they are in control of so that they can identify internal issues and correct them in a timely fashion.

Recent technological advances in various fields have enabled us to excel in ways that before weren’t even imaginable. Innovative dashboards have enhanced business practices.  Marketing opportunities have expanded due to augmented reality. Millions of dollars can be made by computers with high frequency trading (that comes with a price). Technology is evolving and impacting our lives each and every day.

References

Henschen, D. (2009, November 19). Enterprise Information Management. Retrieved from Smarter Execs Focus On Goals, Not Just Metrics: http://enterpriseinformationmanagement.wordpress.com/2009/11/19/smarter-execs-focus-on-goals-not-just-metrics/

Roberts Jr., G. (2012, January 16). inmanNews. Retrieved from Real estate get dose of augmented reality: http://www.inman.com/news/2012/01/16/real-estate-gets-dose-augmented-reality

Laudon, K. C., & Laudon, J. P. (2012).  Management information systems:  managing the digital firm (12th ed).  Upper Saddle River,   NJ:  Pearson Prentice Hall.

Thomas/Reuters. (2011, May 5). MoneyNews. Retrieved from SEC's Schapiro: We Can't Prevent 'Flash Crash' Repeat: http://www.moneynews.com/FinanceNews/SEC-Schapiro-Prevent-Flash/2011/05/05/id/395298

Erik Erikson's Sixth Stage of Psychosocial Development: Intimacy versus Isolation

The psychosocial conflict of intimacy versus isolation is the sixth stage of Erik Erikson’s psychosocial development theory. It usually occurs in 19-40 year old adults. The process specifically involves the formation of intimate and loving relationships.  We seek out mutually satisfying relationships through marriage and friends. Erikson believes that “having a fully formed sense of self (established during the identity versus confusion stage) is essential to being able to form intimate relationships” (Cherry, about.com psychology, n.d.).

People who lack a sense of self have shown in studies to have more commitment issues than those who developed a strong sense of who there are. Depression, loneliness, and emotional isolation frequently accompany the commitment issues. Erikson notes that people who are able to develop close and committed relationships will be able to avoid loneliness and isolation throughout life.  Successful development throughout this stage results in the experience of a deep level of intimacy. When we are unable to experience this intimacy “our world can begin to shrink as, in defense, we can feel superior to others” (Harder, 2002).

A good example of someone who has failed to develop intimate relationships on television today is the show House. House lives alone and has few friends, even lacking people who like him. “His behavior often borders on antisocial, but House is a brilliant diagnostician whose unconventional thinking and flawless instincts afford him a great deal of respect” (FOX, 2012).  He feels superior and smarter than everyone he interacts with and exhibits all of the qualities that Erikson describes people who fail at intimacy have.

References

Cherry, K. (n.d.). about.com psychology. Retrieved from Itimacy Versus Isolation: http://psychology.about.com/od/psychosocialtheories/a/intimacy-versus-isolation.htm

FOX. (2012). Fox. Retrieved from House: http://www.fox.com/house/about/

Harder, A. F. (2002). Learning Place Online. Retrieved from The Developmental Stages of Erik Erikson: http://www.learningplaceonline.com/stages/organize/Erikson.htm