Meaning and concepts of marketing

Meaning

According to American Marketing Asociation¹: “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives.” This definition focuses on the following aspects of marketing:

·         It recognizes marketing as a process. The process involves planning and implementation of the marketing activities, such as conception, pricing, promotion and distribution of products (ideas, goods and services).

·         These marketing activities are undertaken to create exchanges that meet individual and organizational goals. The individual goals include satisfaction and utility from the product. The organizational goals include profit and long term survival of the organization.

According to Philip Kotler “Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others. ”² This definition focuses on the following aspects of marketing:

1.      Peter D. Bennet(Ed), Dictionary of Marketing Terms, AMA, Chicago, USA, 1995.

2.      Philip Kotler, Marketing Management, 9^th ed., Prentice Hall India, p.9

·         Marketing is a social process performed by individuals and groups.

·         Marketing is performed for meeting needs and wants of products.

·         Marketing is concerned with creating, offering and exchanging product and services.

Financial Structure

Financial Structure

There are persistent differences across industries in the financial structure of the liabilities side of their balance sheets. Understanding these differences and why they persist is a central, and as yet unresolved, issue in financial economics. If there is an optimal capital structure for a company it will minimize the opportunity cost of capital and maximize shareholders’ wealth. Debt is a two edged swords- it increases shareholder returns when the firm has high operating income, but makes them worse than they otherwise would be when the firm has low operating income.

Key chapter concepts

·         Financial structure refers to the way the firm’s assets are financed. Financial structure is represented by the entire right hand side (in USA) and left hand side (in Nepal) of the balance sheet. It includes short term debt and long term debt as well as shareholders’ equity.

·         Capital structure or the capitalization of the firm is the permanent financing represented by long-term debt, preferred stock and shareholders’ equity. Thus a firm’s capital structure is only a part of its financial structure.

·         The optimal capital structure occurs at the point at which the overall cost of capital is minimized and firm value is maximized.

·         Leverage involves the use of fixed operating costs (depreciation, salaries, rent etc.) and fixed capital costs (interest, preferred stock dividend) by a firm.

·         The use of operating fixed cost creates operating leverage and this shows the relationship between sales and EBIT. The degree of relationship is measured by degree of operating leverage (DOL).

o        The degree of operating leverage (DOL) is defined as the percentage charge in EBIT resulting from 1 percent change in sales.

o        DOL also indicates the business risk and all other things being equal the higher a firm’s DOL, the greater is its business risk.

o        The degree of operating leverage approaches towards maximum as the firm comes closer to operating at its breakeven level of output.

·         The use of financial fixed cost creates financial leverage and this shows the relationship between EBIT and EPS. The degree of relationship is measured by degree of financial leverage(DFL)

o        Degree financial leverage is defined as the percentage change in earnings per share (EPS) resulting from 1 percent change in EBIT.

o        The degree of financial leverage approaches a maximum as the firm comes closer to operating at its loss level, the level were EPS = $0.

o        The DFL also measure the financial risk of a firm. All other things being equal the higher a firms DFL, the greater is its financial risk.

o        Financial risk, the additional variability of a firm’s EPS that results from the financial leverage, can also be measured by various financial ratios, such as the debt to total assets ratio and the times interest earned ratio.

·         The combined (total) leverage creates due to the use of total fixed cost and this leverage shows the relationship between sales and EPS. The degree of relationship is measured by degree of combined leverage (DCL).

o        The degree of combined leverage (DCL) is defined as the percentage change in earning per share resulting from a 1 percent change in sales. It is equal to the DOL for a company times that company’s DFL. The degree of combined leverage used by a firm is a measure of the overall variability of EPS due to the use of fixed operating and capital costs, as sales levels change.

·         EBIT-EPS analysis is an analytical technique that can be used to help determine the circumstances under which a firm should employ financial leverage.

·         The indifference point in EBIT-EPS analysis is that level of EBIT where earnings per share are equal at two different alternative of financing alternatives.

Insurance

It is superior dealing board to defend the property of your trade against unforeseen actions. This defense frequently comes in the form of insurance. An insurance policy may be generally clear as a agreement beneath which the insurer agrees, in come again for a best, to cover the insured for loss suffered as a result of the occurrence of specified events which cause the destruction, loss or injury of something in which the insured has an interest. Here is a list of some of the types of business insurance available.

Input person

It is common in small business for the successful operation of the business to hinge on the well being of one person. Insurance cover can be taken against loss of income, in the event of injury, disability or death to the key person.

Public liability

Provides insurance cover against accidental injury to clients, customers and visitors to your business premises.

This cover is considered essential to all businesses and cover of up to $5M is normal for a small retail operation.

Cash

It is possible to insure against theft of cash held on the business premises, in transit or held at home.

Loss of profit

If your business is unable to trade, due to the occurrence of an insurable event, this cover can provide for loss of profits incurred during the period of non-trading. Of course you will have to provide evidence of actual profits lost.

Contents

This should cover all plant, equipment, fixtures and fittings as well as business stock.

Product liability

This indemnifies the manufacturer and/or distributor against injury caused by their product, or the use of their product.

Professional indemnity

Provides insurance protection against negligence for professionals and experts delivering services, advice and information to clients.

Motor vehicle

Vehicles owned and used by the business should be insured, as would your own personal vehicles. If you are using your personal vehicle in the business, the insurer should be notified so that the policy can be noted.

Workers’ compensation

Accident and sickness insurance cover must be provided for employees through an approved insurer. Self-employed persons provide accident and sickness insurance through a private insurer.

Superannuation

It is significant for all people to provide for their giving up work years, together with business owners. Superannuation is generally the vehicle used to provide for a retirement plan. For detailed advice and information on the type and cost of insurance to best suit your business, you should consult reputable insurance agents or brokers. On the other hand, speak to your Industry Association for referrals to an agent who can provide the right insurance. No responsibility for any loss or damage howsoever caused by reliance on any of the information or advice provided by or on behalf of the State of South Australia or the providers of this service or damage arising from acts or omissions made is accepted by the State of South Australia, the providers of this service or their officers, servants or agents.

Building

Generally only required if you own the premises in which your business is located.

NOTE: It is common for a tenant to be required to insure plate glass against breakage in leased premises.

If you are conducting a business from your home, the insurer of your home should be notified so that the policy can be noted and the premium adjusted if necessary.

Travel Insurance for you family

By means of the cost of travel insurance at all time lows, and the wide choice of coverage that’s on hand, it doesn’t make sense to hit the road lacking swap over a travel insurance system. Travel insurance isn’t just for skilled travelers anymore. Everyone, particularly families heading out on holiday, can buy a lot of harmony of mind for a few dollars.

Here’s a look for when people selecting a travel insurance procedure:   
If medical coverage is provided, does it cover all actions that you are expected to become concerned in such as scuba diving or parasailing? 
Is your travel insurance provider a valued company with a first grade rating from an insurance rating organization such as A.M. Best?     
Are there necessities for medical coverage if you happen to sick or injured in a country where your health insurance is not accepted?        
Does the policy provide arrest bond coverage in case you are involved in a legal incident while you are away from home?            
Will you travel insurance give money back you for fares and hotel cost in the event that your tour is cancelled or seriously broken up?      
Are policy restrictions high enough to give money back you for all fatalities?      
Does the travel insurance policy have any limitations or restrictions that would make buying it not suitable for your exacting conditions?      
Does the travel insurance plan make available coverage for all family members traveling together?
Does the policy cover lost baggage as well as smash up to personal assets if the carrier mishandles your baggage?         
Does your travel insurance supplier have 24-hour help line that can be reached from the places that you will be roaming to?           
Does the travel insurance policy also cover reimbursement for normal attorney and legal operating cost that may be associated to an event that occurs at the same time as you are on the road?       
Does the travel insurance provider offer yearly policies for people who travel often?      
Can your claims be processed from anywhere in the world or do you have to stop until you come back home to get remunerated?   

Not all insurance companies provide each of this coverage and services and, in fact, you might not in point of fact require coverage from all of these perils. Your best bet is to use these guidelines to make a list of the items that are important to you and then look for a provider that meets all of your needs. That way you’ll end up with the most coverage possible for the least amount of money. Then all you have to do is hope that you never actually have to use your travel insurance.

Auto Insurance in description

Auto insurance is now required in 47 of the 50 United States. But even if you live in one of those three states that do not require car insurance, you’re probably risking a lifetime of financial ruin if you drive unprotected. All it takes is for you to be found guilty of causing an accident with serious damage, personal injuries, or fatalities and you could lose your house and every penny you have or will ever earn. It’s simply not worth the risk. Just because you have to do auto insurance there is no need to pay many to get it. Here are some saving tips to keep in mind when you are starting auto insurance:

Compare Prices among different auto insurance: - Vary greatly among different auto insurance providers in everywhere. There is no such thing as a “fix in standard rate”. Firstly you must visit your State Insurance Commissioner’s place to get information of all auto insurance companies that are licensed to write car insurance policies in your state and then get a quote from each one.

Check the Auto Insurance Company’s quality services: - It doesn’t do you any good to get car insurance from a company that might not be around to pay the claim.

Get advice to decide on price: - Talk to some professional in auto insurance, friends, family and neighbors to see who they insure their cars with. Besides less prices, you want an auto insurance company that will do you fair and that will respond to claims quickly and professionally on your investment.

Save money with higher deductibles: - A deductible is the amount that you will have to pay out of your own pocket for damage before the auto insurance company kicks in. Highest is the deductible, Lowest is your premium will be. Simply raising your deductible from $2000 to $5000 could result in annual premium savings of as much as 30%. Even higher deductibles will yield greater savings. A $10000 deductible could save you 40% of your premium costs.

Ask for more discounts: - Many auto insurance companies offer some discounts for safe drivers, auto alarm systems, Anti-Lock Brake Systems (ABS), multiple auto coverage, accidental insurance and having your home and auto insurance. Be sure to ask your agent for a complete list of each concession they propose and then apply for any that you become certified for.

A few times spent doing your homework can save you much of dollars per year. It’s worth the effort done by you.

REFERENCE SOURCES OF insurance terms

Survey definitions from:

¨ The National Compensation Survey definitions (BLS),

¨ The Medical Expenditure Panel Survey definitions (AHRQ), and

¨ The National Employer Health Insurance Survey definitions (NCHS).

Definitions from other Federal agencies and surveys, such as:

¨ The Current Population Survey (BLS/Census)

¨ ERISA-related definitions (from PWBA)

Glossaries and informational papers from websites such as:

¨ OPM’s Federal Employees Health Benefit Plans (glossary and specific plan booklets),

¨ Blue Cross / Blue Shield,

¨ The National Center for Policy Analysis, and

¨ The Health Insurance Association of America.

Publications such as:

¨ Employee Benefit Plans: A Glossary of Terms, Ninth Edition 1997, Judith A. Sankey

- Editor, International Foundation of Employee Benefit Plans.

¨ "Fundamentals of Employee Benefit Programs, Fourth edition"

¨ "Managed Care Plans and Managed Care Features: Data from the EBS to the NCS",

Cathy A. Baker and Iris S. Díaz, Compensation and Working Conditions, Spring

2001

¨ EBRI Notes Vol. 16, no. 7, July 1995

¨ HIAA Source Book

Personal communications with staff from some of the data sources cited above.

Life insurance plan

How would your family manage in the event of your death? What would you do if you were diagnosed with a terminal illness? A term life insurance plan provides financial support to a policyholder's family in the event of the policyholder's death. If a policyholder should die during this time then the plan will make available a cash advantage. This cash benefit is more often than not used to help pay for your children's education, food and holidays as well as any bills connected with the death, outstanding mortgage, estate duties, and relief for any beneficiaries that would have been valuable by the loss.

A Term Life plan will only make available monetary repayment if the policyholder dies within the fixed time frame. A Term Life policy will offer no other reimbursement apart from the stated cash advantage in the event of death; however, some Term life policies are connected to a terminal illness benefit that is usually equal to the amount of the death advantage

A term life policy will provide life shield for a fixed length of time usually between 5 and 35 years. Term life policies are planned to care for your family and appreciated ones until such time as they are financially self-determining. This targeted policy length allows for more flexibility within the plan.

It is significant to note that premiums linked with term life policies will not rise and fall all the way through the course of the plan. These plans are intended to provide a high value low cost level of defense across the policies existence. When you make a decision to buy a term life policy, everything from the type of currency that the premiums are paid in, terminal illness options, and the length of the plan are at your be in charge of.